The market economy is born
After the war, Germany’s economy was in a sorry state. The first industrial plan made by the victorious powers envisaged restricting capacity in Germany’s industry to 50 per cent of the capacity achieved in 1936. It was a disaster! Experts calculated that under these circumstances every German citizen could only get a plate every five years, new shoes every twelve years and a new suit every fifty years. In 1947, output in Germany’s industry did not even achieve 40 per cent of the utilization achieved in 1936. Germany was in utter chaos. Suppressed inflation spread, goods remained in warehouses and the natural pricing mechanism was suspended. Bartering and “cigarette money” on the black market were rampant. The year 1948, with its monetary reform combined with economic reform, offered an opportunity to start again.