6 ms·

Wow, that's a pretty appalling article. Seems to avoid even mentioning the desire of most of Europe to try and learn from what went wrong after the Great War.

by buro9 9y ago

Wow, that's a pretty appalling article. Seems to avoid even mentioning the desire of most of Europe to try and learn from what went wrong after the Great War. In 1918-1930 Germany was left so weakened by peace treaties that the seeds were sown for WW2. Post-WW2 the allies felt that a Germany crippled would only bring future wars, and a huge co-ordinated effort to build a sustainable industry and economic growth was put into motion. Germany and the people of Germany should profit from peace. Part of this was the Marshall Plan, part the European Recovery Program. This positioned Germany to have a couple of advantages, namely that the Victorian era mass production methods that had been pioneered could be discarded (but remained in place in a lot of the other European developed countries). In Germany these were fully replaced by WW2 era production methods as most of Germany's industrial capability had been destroyed or damaged. Additional processes to limit industrial capabilities (the key method of which was limiting steel output of the Ruhr Valley, which acted to restrain all industry) meant that industry was incentivised to find a larger profit per unit rather than slimmer margins from more units. Combined with not being able to maintain a military, Germany was able to invest in skilled manufacturing like no-one else were able to. Over a course of 50 years this resulted in not just a modern manufacturing capability to be put in place, but for that to be at the very highly skilled end of manufacturing. The reason so many of the mid-sized market leaders come from Germany can be traced back to post-WW2 policies to ensure that Europe could be at peace. Some of these policies were undoubtedly exploitative in the short term, but long term have achieved their goal.

olewhalehunter 9y ago
does the fact that Germany is right smack in the middle of Europe between Eastern European powers that can supply cheap (EDIT: and skilled, looking for better universities or opportunities) labor and Western/Northern European markets that can afford their goods have anything to do with this?
- buro9 9y ago
  Not really as that only represents time since the Berlin Wall fell. Whilst the flood of cheap labour is of course an important factor since then... the companies being talked about established themselves long before the borders were opened.
- pluma 9y ago
  Not really. Historically (especially in the massive growth period after WW2 and before the reunification) the largest influx of immigrant workers came from countries like Italy and Turkey. A large number of seasonal workers these days come from Eastern Europe but that doesn't explain the decades prior.
  - olewhalehunter 9y ago
    Historically (since about the 1700s) didn't large numbers of Europeans from all over the continent go there for the conveniently located scientific community and trade crossroads?
    - pluma 9y ago
      Germany didn't really exist as a nation until 1815 so I'm not sure what you're arguing. Also the Eastern borders of Germany changed a lot until 1990. Also the current economic situation of Eastern Europe has likely more to do with the failure of the Soviet Union than with whatever happened in the 1700s.
pm90 9y ago
I wonder how/whether increasing the defense budget would help the German economy. Let me just say right away, that I am in no way advocating for increasing the supply of arms and ammunition in the world, which already seems to be at dangerous levels. However, if Germany invested as much in military R&D and a domestic arms industry, I wonder if that would boost the economy as it has done in the US. Also, the immigration system seems less broken for smart people to emigrate to Germany. Could probably get the best global talent as well.
- thesumofall 9y ago
  Likely difficult to get proper data on that but two things make me doubtful that increased military expenditure would boost its economy: - it's likely that significant part of the spend would go to the US and hence not really help the German economy - recent European (and also US) military projects were pretty much a disaster (the A400M being a point in case). Not that this would be much different in other countries but it leaves you wondering how effective it really is to spend money on the military rather than proven ROI-positive investments such as education Edit: Also, it's not like Germany would really struggle economically ;-)
- mtgx 9y ago
  I don't think it's as much the fact that the US invested in the military sector as it is the fact that the US invested in something. What I mean by that is that yes, the US likely benefited from investing trillions of dollars in the military. But it could've also benefited, perhaps even more so, if it had invested trillions of dollars in infrastructure. This would have made it easier and cheaper for businesses to ship their products across the states, as well as creating a lot of blue collar people jobs. Perhaps the same would be true if the US invested trillions of taxpayer dollars in other industries, too (healthcare, manufacturing, solar industry, etc).
  - eeZah7Ux 9y ago
    > investing trillions of dollars in the military These are sometimes covert handouts though inflated costs. > But it could've also benefited, perhaps even more so, if it had invested trillions of dollars in infrastructure ...still, military power and influence plays a big part part in international negotiation.
literallycancer 9y ago
It's interesting, because many of the neighboring countries were in much better shape after the war, but since they were forced by the Soviets to reject the Marshall plan, Germany got ahead economically and Eastern Europe became the "poor part of Europe" again.
mbid 9y ago
> post-WW2 policies to ensure that Europe could be at peace What do you mean by this? According to Wikipedia, the other Western European nations semm to have received more funds from the Marshall Plan than Germany did. > most of Germany's industrial capability had been destroyed or damaged Source? I remember my history teacher telling us the exact opposite. Anyway, I don't understand how your points shed light on the differences in ecomomic structure to other Western nations, e.g. France.
krona 9y ago
Another geopolitical factor unaddressed is the more recent export growth of the other CE4 countries (Czech Republic, Hungary, Poland, and the Slovak Republic) in to Germany since 1990. The growth of these supply chains to the east play a big part in the German global export machine, largely at the expense of the competitiveness of southern European countries. https://www.imf.org/external/pubs/cat/longres.aspx?sk=40987.0 https://www.imf.org/external/pubs/cat/longres.aspx?sk=40987....
izacus 9y ago
> (most of Germany's industrial capability had been destroyed or damaged) Tony Judt in Post War (https://www.goodreads.com/book/show/29658.Postwar https://www.goodreads.com/book/show/29658.Postwar) actually claims that this is patently false. That Germany actually came out of WW2 with most of its industry intact (it was away from the most bombed cities and majority of fighting actually happened in France/Poland/USSR) and was in significantly better shape than Frace and UK industry-wise. As an added bonus, the industrial lines were freshly retooled, significantly more modern than the ones in France and UK and its wartime focus could be rather rapidly converted into highly profitable peacetime industries that were highly sought after in 20th century economic boom (chemistry, car manufacturing, electronics, etc.) The fact that BRD didn't have to support and invest into standing army also funneled investment into emerging industries - investment that was way slower to come in destroyed France and exausted UK. Was he wrong? Are there any sources contradicting his research?
- auggierose 9y ago
  Yeah, GDR doesn't mean what you think it means.
  - izacus 9y ago
    Ack, yeah, I meant western germany (FRG/BDR) not eastern :)
- mbid 9y ago
  An anecdote on this: After the second world war, 93% of Volkswagen's equipment was still usable (https://de.wikipedia.org/wiki/Volkswagen_AG#Nachkriegszeit https://de.wikipedia.org/wiki/Volkswagen_AG#Nachkriegszeit).
- Retric 9y ago
  It's simplified Germany took a few years, policy changes, and loans to really get back into shape. https://en.m.wikipedia.org/wiki/Wirtschaftswunder https://en.m.wikipedia.org/wiki/Wirtschaftswunder Longer term it benefited from both good longer term policies and positive cultural influences, and the Korean War. But yea, Germany had more intact industry than often portrayed.
MrFoof 9y ago
>The reason so many of the mid-sized market leaders come from Germany can be traced back to post-WW2 policies to ensure that Europe could be at peace. Some of these policies were undoubtedly exploitative in the short term, but long term have achieved their goal. Hilariously, the Volkswagen designs (The Type 1/Beetle), factories, etc. were actually offered as a free war reparation to both the US and to Britain. However, neither party was interested... in what would end up being the most profitable automotive concern on the planet. It is considered the single greatest blunder of the entire automotive industry. James May makes a mention of it in his Cars of the People series: https://youtu.be/6pmp0Oxg520?t=11m54s https://youtu.be/6pmp0Oxg520?t=11m54s
- PretzelFisch 9y ago
  There is no guarantee that under different management the same success would have resulted. So blunder?
  - MrFoof 9y ago
    Although I'd agree that the Volkswagen Group as a whole may not be the same as it is today if it were under different management... ...it remains that passing up a robust, reliable, and simple car design -- and the factories/tooling to produce it -- for an acquisition cost of zero is still a blunder.
Pica_soO 9y ago
Okay, first things- first - no lessons where learned, nobody out of the good of their hearts did anything for anybody. The original plan after world war 2 was to turn Nazi Germany into a agrarian border stripe between the two emerging power blocks. This plan was put into action, and some starvation resulted from the dismantling and moving of the factories. The reason this changed is because the cold war tensions, made it necessary to bind the former enemy as a useful puppet and ally to each corresponding site. Thus west and east Germany got away with a blue eye for blundering and murdering east European countries and several minorities. There is no moral here to be taken home with- maybe some tactical advice- if you want to stab and rob your neighbor - do it in the midst of a gang-shootout and then join in on the side nearby with the stolen goods and weapon.
- deleted 9y ago
  [deleted]
- foepys 9y ago
  You say that like every single German personally executed jews and other minorities. Yes, a lot of Germans did. Yes, more Germans went along and didn't do anything against the Nazis. But only a minority of Germans knew how bad it was. My grandmother told me that they knew about some labor camps were certain people were put. She said that she didn't know anything about the industrialized murder. If you look on the map, you will see that the extermination camps (the concentration camps constructed to kill people) were located outside of the German Reich so that the German public would not get to know about it. Hitler knew that the extermination camps could weaken his position and enrage the public. Most Wehrmacht soldiers followed orders and marched against the enemy they were told to shoot at. Yes, this is also bad and "I just followed orders" should not be an excuse. But the recent 72 years showed that most Germans were peaceful and just wanted to live their live. Homecoming soldiers didn't jump on the next minority and beat them up. The overwhelming majority was just happy that everything is over. Hitler was never elected by a majority and he came to his final power through a coup d'état.
  - Pica_soO 9y ago
    There is a program called "Stolpersteine"- they have put little bronze-bricks into the streets before houses where Jews and others who where "Transported" lived. There are little bronze bricks in nearly every street of the town i live nearby. Yet many of the old people there claim to never have known. And many claim they have helped the prisoners in some way. https://en.wikipedia.org/wiki/Stolperstein https://en.wikipedia.org/wiki/Stolperstein The Wehrmacht shot and torched whole villages for partisan activity. And soldiers talk- they have convoys through the hinterland- they knew exactly what the SS was doing in the conquered territories. They guarded millions of war-prisoners while not giving them food and shelter until they succumbed. Im not singling out germany. Every country, and all people on the planet are capable of this. WorldWar2 or the holocaust where not something particular unique. They where just humanity's worst behavior combined with organization skill and industrial capacity's. Stalins Holdomor, the Archipel Gulag or Maos Killing spree are similar in dimension but lacked the cultural scenes echo chamber for sentimental political reasons. These messy large scale crimes where not ended by education, a protest generation or self civilization of the species, but by the invention of the nuclear bomb, which limited the war like activities of larger, well organized nations. Among non nuclear deterred groups or within country's, such breaks of civilization can happen anytime even today. (See Yugoslawia, Iraq/Syria, The Hutu/Tutsi Genocide) I also assume some dictators started to turn away from ethnic scape-goating, after in several countrys riled up masses turned against them and China showed that even a crony-corrupt-dictatorship can be economically functional.
darpa_escapee 9y ago
There is also a surprising lack of mention about trade unions, work councils and worker voting rights in companies.
ricw 9y ago
This is just incorrectly attributing germanys success to the Marshall plan! Yes, the Marshall plan helped Germany recover. But the Marshall plan had absolutely nothing to do with the "Mittelstand" emerging as a predominant industry type. There is nothing in the Marshall plan that enabled this to happen. More than anything, this has to do with German ability to unite goals of labour and market capitalism, commonly referred to as social capitalism in Germany. It majorly aligns labour and company ownerships goals. Labour wants to have reliable jobs, which you achieve by being highly skilled and thereby competitive. Owners want to be competitive and can do this via highly skilled labour. Labour representatives are by law required to be on a companies board. This is what forces labour and owners to work together. It has lead to a highly skilled and competitive workforce that enables the Mittelstand. There are other factors that help, but none of them are as important. This has nothing as such to do with the Marshall plan. It's very ignorant to attribute this success to "americas help". it's borderline offensive and does not actually engage with the primary argument in the article. If you want to learn from germanys success, you should read up on labour represantatives being on the company board, rather than attributing it to something that is barely related.
someSven 9y ago
Germany was strong before WK2, the buildings where gone, but the enterpreteneurs, scientists, developers, the workers morale and their experince were still there. Also obedience of the law, memories about how things should be organized etc. If some money would help so much, more contries would be doing better. If some money would help, more countries qould be soing better.

by buro9 9y ago

olewhalehunter 9y ago

does the fact that Germany is right smack in the middle of Europe between Eastern European powers that can supply cheap (EDIT: and skilled, looking for better universities or opportunities) labor and Western/Northern European markets that can afford their goods have anything to do with this?

buro9 9y ago
Not really as that only represents time since the Berlin Wall fell. Whilst the flood of cheap labour is of course an important factor since then... the companies being talked about established themselves long before the borders were opened.
pluma 9y ago
Not really. Historically (especially in the massive growth period after WW2 and before the reunification) the largest influx of immigrant workers came from countries like Italy and Turkey. A large number of seasonal workers these days come from Eastern Europe but that doesn't explain the decades prior.
- olewhalehunter 9y ago
  Historically (since about the 1700s) didn't large numbers of Europeans from all over the continent go there for the conveniently located scientific community and trade crossroads?
  - pluma 9y ago
    Germany didn't really exist as a nation until 1815 so I'm not sure what you're arguing. Also the Eastern borders of Germany changed a lot until 1990. Also the current economic situation of Eastern Europe has likely more to do with the failure of the Soviet Union than with whatever happened in the 1700s.

pm90 9y ago

I wonder how/whether increasing the defense budget would help the German economy. Let me just say right away, that I am in no way advocating for increasing the supply of arms and ammunition in the world, which already seems to be at dangerous levels. However, if Germany invested as much in military R&D and a domestic arms industry, I wonder if that would boost the economy as it has done in the US. Also, the immigration system seems less broken for smart people to emigrate to Germany. Could probably get the best global talent as well.

thesumofall 9y ago
Likely difficult to get proper data on that but two things make me doubtful that increased military expenditure would boost its economy: - it's likely that significant part of the spend would go to the US and hence not really help the German economy - recent European (and also US) military projects were pretty much a disaster (the A400M being a point in case). Not that this would be much different in other countries but it leaves you wondering how effective it really is to spend money on the military rather than proven ROI-positive investments such as education Edit: Also, it's not like Germany would really struggle economically ;-)
mtgx 9y ago
I don't think it's as much the fact that the US invested in the military sector as it is the fact that the US invested in something. What I mean by that is that yes, the US likely benefited from investing trillions of dollars in the military. But it could've also benefited, perhaps even more so, if it had invested trillions of dollars in infrastructure. This would have made it easier and cheaper for businesses to ship their products across the states, as well as creating a lot of blue collar people jobs. Perhaps the same would be true if the US invested trillions of taxpayer dollars in other industries, too (healthcare, manufacturing, solar industry, etc).
- eeZah7Ux 9y ago
  > investing trillions of dollars in the military These are sometimes covert handouts though inflated costs. > But it could've also benefited, perhaps even more so, if it had invested trillions of dollars in infrastructure ...still, military power and influence plays a big part part in international negotiation.

literallycancer 9y ago

It's interesting, because many of the neighboring countries were in much better shape after the war, but since they were forced by the Soviets to reject the Marshall plan, Germany got ahead economically and Eastern Europe became the "poor part of Europe" again.

mbid 9y ago

> post-WW2 policies to ensure that Europe could be at peace What do you mean by this? According to Wikipedia, the other Western European nations semm to have received more funds from the Marshall Plan than Germany did. > most of Germany's industrial capability had been destroyed or damaged Source? I remember my history teacher telling us the exact opposite. Anyway, I don't understand how your points shed light on the differences in ecomomic structure to other Western nations, e.g. France.

krona 9y ago

Another geopolitical factor unaddressed is the more recent export growth of the other CE4 countries (Czech Republic, Hungary, Poland, and the Slovak Republic) in to Germany since 1990. The growth of these supply chains to the east play a big part in the German global export machine, largely at the expense of the competitiveness of southern European countries. https://www.imf.org/external/pubs/cat/longres.aspx?sk=40987.0 https://www.imf.org/external/pubs/cat/longres.aspx?sk=40987....

izacus 9y ago

> (most of Germany's industrial capability had been destroyed or damaged) Tony Judt in Post War (https://www.goodreads.com/book/show/29658.Postwar https://www.goodreads.com/book/show/29658.Postwar) actually claims that this is patently false. That Germany actually came out of WW2 with most of its industry intact (it was away from the most bombed cities and majority of fighting actually happened in France/Poland/USSR) and was in significantly better shape than Frace and UK industry-wise. As an added bonus, the industrial lines were freshly retooled, significantly more modern than the ones in France and UK and its wartime focus could be rather rapidly converted into highly profitable peacetime industries that were highly sought after in 20th century economic boom (chemistry, car manufacturing, electronics, etc.) The fact that BRD didn't have to support and invest into standing army also funneled investment into emerging industries - investment that was way slower to come in destroyed France and exausted UK. Was he wrong? Are there any sources contradicting his research?

auggierose 9y ago
Yeah, GDR doesn't mean what you think it means.
- izacus 9y ago
  Ack, yeah, I meant western germany (FRG/BDR) not eastern :)
mbid 9y ago
An anecdote on this: After the second world war, 93% of Volkswagen's equipment was still usable (https://de.wikipedia.org/wiki/Volkswagen_AG#Nachkriegszeit https://de.wikipedia.org/wiki/Volkswagen_AG#Nachkriegszeit).
Retric 9y ago
It's simplified Germany took a few years, policy changes, and loans to really get back into shape. https://en.m.wikipedia.org/wiki/Wirtschaftswunder https://en.m.wikipedia.org/wiki/Wirtschaftswunder Longer term it benefited from both good longer term policies and positive cultural influences, and the Korean War. But yea, Germany had more intact industry than often portrayed.

MrFoof 9y ago

>The reason so many of the mid-sized market leaders come from Germany can be traced back to post-WW2 policies to ensure that Europe could be at peace. Some of these policies were undoubtedly exploitative in the short term, but long term have achieved their goal. Hilariously, the Volkswagen designs (The Type 1/Beetle), factories, etc. were actually offered as a free war reparation to both the US and to Britain. However, neither party was interested... in what would end up being the most profitable automotive concern on the planet. It is considered the single greatest blunder of the entire automotive industry. James May makes a mention of it in his Cars of the People series: https://youtu.be/6pmp0Oxg520?t=11m54s https://youtu.be/6pmp0Oxg520?t=11m54s

PretzelFisch 9y ago
There is no guarantee that under different management the same success would have resulted. So blunder?
- MrFoof 9y ago
  Although I'd agree that the Volkswagen Group as a whole may not be the same as it is today if it were under different management... ...it remains that passing up a robust, reliable, and simple car design -- and the factories/tooling to produce it -- for an acquisition cost of zero is still a blunder.

Pica_soO 9y ago

Okay, first things- first - no lessons where learned, nobody out of the good of their hearts did anything for anybody. The original plan after world war 2 was to turn Nazi Germany into a agrarian border stripe between the two emerging power blocks. This plan was put into action, and some starvation resulted from the dismantling and moving of the factories. The reason this changed is because the cold war tensions, made it necessary to bind the former enemy as a useful puppet and ally to each corresponding site. Thus west and east Germany got away with a blue eye for blundering and murdering east European countries and several minorities. There is no moral here to be taken home with- maybe some tactical advice- if you want to stab and rob your neighbor - do it in the midst of a gang-shootout and then join in on the side nearby with the stolen goods and weapon.

deleted 9y ago
[deleted]
foepys 9y ago
You say that like every single German personally executed jews and other minorities. Yes, a lot of Germans did. Yes, more Germans went along and didn't do anything against the Nazis. But only a minority of Germans knew how bad it was. My grandmother told me that they knew about some labor camps were certain people were put. She said that she didn't know anything about the industrialized murder. If you look on the map, you will see that the extermination camps (the concentration camps constructed to kill people) were located outside of the German Reich so that the German public would not get to know about it. Hitler knew that the extermination camps could weaken his position and enrage the public. Most Wehrmacht soldiers followed orders and marched against the enemy they were told to shoot at. Yes, this is also bad and "I just followed orders" should not be an excuse. But the recent 72 years showed that most Germans were peaceful and just wanted to live their live. Homecoming soldiers didn't jump on the next minority and beat them up. The overwhelming majority was just happy that everything is over. Hitler was never elected by a majority and he came to his final power through a coup d'état.
- Pica_soO 9y ago
  There is a program called "Stolpersteine"- they have put little bronze-bricks into the streets before houses where Jews and others who where "Transported" lived. There are little bronze bricks in nearly every street of the town i live nearby. Yet many of the old people there claim to never have known. And many claim they have helped the prisoners in some way. https://en.wikipedia.org/wiki/Stolperstein https://en.wikipedia.org/wiki/Stolperstein The Wehrmacht shot and torched whole villages for partisan activity. And soldiers talk- they have convoys through the hinterland- they knew exactly what the SS was doing in the conquered territories. They guarded millions of war-prisoners while not giving them food and shelter until they succumbed. Im not singling out germany. Every country, and all people on the planet are capable of this. WorldWar2 or the holocaust where not something particular unique. They where just humanity's worst behavior combined with organization skill and industrial capacity's. Stalins Holdomor, the Archipel Gulag or Maos Killing spree are similar in dimension but lacked the cultural scenes echo chamber for sentimental political reasons. These messy large scale crimes where not ended by education, a protest generation or self civilization of the species, but by the invention of the nuclear bomb, which limited the war like activities of larger, well organized nations. Among non nuclear deterred groups or within country's, such breaks of civilization can happen anytime even today. (See Yugoslawia, Iraq/Syria, The Hutu/Tutsi Genocide) I also assume some dictators started to turn away from ethnic scape-goating, after in several countrys riled up masses turned against them and China showed that even a crony-corrupt-dictatorship can be economically functional.

darpa_escapee 9y ago

There is also a surprising lack of mention about trade unions, work councils and worker voting rights in companies.

ricw 9y ago

This is just incorrectly attributing germanys success to the Marshall plan! Yes, the Marshall plan helped Germany recover. But the Marshall plan had absolutely nothing to do with the "Mittelstand" emerging as a predominant industry type. There is nothing in the Marshall plan that enabled this to happen. More than anything, this has to do with German ability to unite goals of labour and market capitalism, commonly referred to as social capitalism in Germany. It majorly aligns labour and company ownerships goals. Labour wants to have reliable jobs, which you achieve by being highly skilled and thereby competitive. Owners want to be competitive and can do this via highly skilled labour. Labour representatives are by law required to be on a companies board. This is what forces labour and owners to work together. It has lead to a highly skilled and competitive workforce that enables the Mittelstand. There are other factors that help, but none of them are as important. This has nothing as such to do with the Marshall plan. It's very ignorant to attribute this success to "americas help". it's borderline offensive and does not actually engage with the primary argument in the article. If you want to learn from germanys success, you should read up on labour represantatives being on the company board, rather than attributing it to something that is barely related.

someSven 9y ago

Germany was strong before WK2, the buildings where gone, but the enterpreteneurs, scientists, developers, the workers morale and their experince were still there. Also obedience of the law, memories about how things should be organized etc. If some money would help so much, more contries would be doing better. If some money would help, more countries qould be soing better.