The Role of the State in the Expansion of the West German Economy, 1949–66

The consideration of foreign policy before domestic policy as factors affecting economic development is a deliberate choice, not because foreign policy can generally be considered primary when approaching an advanced industrial economy, but because West Germany occupied a very special position within the Western community which required far greater attention to foreign political and economic relations than any other nation of its standing. Nevertheless there is a sense in which, with the emergence of two major federations of states after the Second World War, individual nation states are obliged to consider bloc allegiances and foreign relations as a contribution to their primary task of guaranteeing a particular constitutional order. This is reinforced in West Germany’s case by specific dependencies: state sovereignty was not achieved until 1955 and was conditional on the approval of the USA, Britain and France, whose forces remained on German soil as armies of occupation; as a recipient of ERP monies and as a member of the OEEC the West German state was formally bound to aid conditions which were determined by non-national interests intent on the maintenance of the post-1949 status quo; outside any formal obligations the recovery of West Germany’s industrial economy demanded both a high level of foreign trade with countries where ‘goodwill’ was in many cases minimal and had therefore to be nurtured, and the abandonment of hitherto strong trade links with Eastern Europe.