West Germany's Post-World War II Economy and Way of Life

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When the Second World War came to a close, much of Germany was in ruins. But within a few years, West Germany's economy had recovered significantly, and the country's political, economic, social, and natural landscape had begun to change. This essay assesses whether the economic policies of West Germany in the middle of the 1950s would have enabled a typical, middle-class citizen to buy a car like a Volkswagen Beetle. Immediately after the war, the Allied Forces had bombed or attacked most of the German infrastructure and facilities acting as social amenities for the German people. Twenty percent of housing was destroyed and food production in 1947 was less than half of the requirement for the existing population and a significant percentage of working age men in the nation were deceased or crippled. It was also a time when the Reichmark, the German currency during the war, was at its lowest value and was deemed literally worthless (Orlow 2016).

In essence, Germany was a failed state whose future seemed very bleak. The nation’s occupation by four nations with different agendas culminated in Germany’s division into two halves. Eastern Germany was occupied by the Nazis and thus became a socialist nation. The Western half, occupied by The United States became a democracy.

West Germany was faced with a huge dilemma during its first few months of administration. The dilemma, which instigated a debate, was regarding the direction that the fiscal policy of the nation would follow. Ludwig Erhard, the minister of Economics and a major player in the economic revolution of Germany, suggested the implementation of certain policies that would make significant positive changes to the German economy (Orlow 2016). Firstly, he contributed majorly to the formulation of a new legal tender to replace the worthless Reichmark. Secondly, he played a part in the decision to reduce taxation, with the objective of fostering investment and expenditure. West Germany also made the decision to remove the price controls on products and services, which had been in place since the commencement of the Second World War. Even though, many of his peers thought of these policies and recommendations by Erhard to be a huge mistake, but he was able to persuade them to go along with it.

Upon implementation of the new policies in 1948, their impact on West Germany was incredible. Once people realized that the new currency was indeed valuable, they took the initiatives to work. In addition, trading places and shops began to open up, with people realizing that commerce could reap financial benefits. Money quickly became the preferred medium of transaction, quickly replacing batter trade that had become popular with the war (Orlow 2016). West Germany experienced robust growth and development, which saw most of the infrastructure and economic frameworks rejuvenate. According to Orlow 2016, the financial institutions of the nation also began to experience significant success, as more people began to access banks to save funds and request for loans to startup and operate businesses.

By the 1950s, West Germany had realized significant reconstruction of its infrastructure and economy. The Deutsche Mark had become very valuable, resulting in even greater growth and development of the West German economy. This time is fondly remembered as ‘the German miracle’, due to the significant changes that the nation and its people experienced (Orlow 2016). The livelihoods of individuals and households improved, with disposable income of individuals increasing significantly. At the same time, the technology industry was seeing significant evolution and growth, particularly the sector of automobiles, which was seeing robust development due to the capacity of Germans to purchase motor vehicles for commercial and private usage.


In analysis of the photograph from West Germany in 1956, it is evident from the above information that average, middle class West German citizens were able to purchase the Volkswagen beetle and similar items. In fact, during this era the Volkswagen Beetle was an icon of West German prosperity and was quite common to find along the roads of the nation (Orlow 2016). The vehicles were being produced in mass and were sold at an affordable price.

The reason that West German citizens could drive their own vehicles in the 1950s is because the West German government had put in place economic policies that were pivotal in the turnaround of the German economy. In addition, the nation’s government also played a critical role in the empowerment of citizens in the nation to acquire and sustain wealth as individuals, households, communities and as a nation.


The years after the Second World War were characterized by significant economic recovery of West Germany and the reconstruction of the nation’s infrastructure. This period, known as the German economic miracle, is a phenomenon that played a key role in the empowerment of the West German residents to earn sufficient incomes and possess assets, such as popular automobiles of the time. It is therefore plausible that the people of West Germany could afford a small automobile such as the Volkswagen Beetle shown in the picture.


Orlow, Dietrich. 2016. A History of Modern Germany: 1871 to Present. London: Taylor & Francis.

July 07, 2023

War World Economics


Mesopotamia Europe

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