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 p roduction easier. Overcoming the crisis earlier than all other World War II powers, therefore, was a precondition for a successful economic mobilizati on for war. This was achieved by a "Keynesian" approach to economic recover y and employment policy which was started with credit financed civilian out lays 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 ra tionalization potential which had accumulated since the twenties. This rati onalization lag continued during the first years of the Third Reich, becaus e emphasis had to be laid on job creation and not on the use of labour savi ng technologies. When, after the mid-thirties, the way for organizational a s well as technical rationalization was largely open, German war industry, under the aegis of Todt and Speer, enjoyed a "miraculous boom" which, howev er, came too late to influence the outcome of the war decisively. Analysis of the German war economy is also essential to understanding the e conomic dynamism of West Germany after 1945. West Germany had clearly gaine d the material preconditions for economic success in the postwar period.