Development of Germany from Low-Class Country to a Developed Country (Essay Sample)

WESTERN GERMANY ECONOMIC MIRACLE
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West Germany "economic miracle”: the transformation from an economically backward country into a competitive one
The Second World War had a great effect on the economy of Germany from the destruction of homes to lower food production rates in the nation. The industrial output was only a third of its capacity, and almost all the working-age men were dead resulting to inadequate manpower. However, despite all these limitations and drawbacks, Germany's is one of the best economies in the world currently. Besides, a decade after the war, the economy of Germany was the topic of discussion globally. This economic turnaround was influenced by many factors among them the elimination of price controls, currency reforms and reduction of marginal tax rates.[Dustmann, Christian, Bernd Fitzenberger, Uta Schönberg, and Alexandra Spitz-Oener. "From sick man of Europe to economic superstar: Germany's resurgent economy." The Journal of Economic Perspectives 28, no. 1 (2014): 167-188.]
The growth of West Germany was in the context of improved productivity and convergence. This is because it finally removed the obstacles that were holding back structural change and productivity growth. Similarly, institutional reasons also led to the growth of the economy. The growth was achieved by abolishing cartels, reduction of state intervention and planning that placed instituted the economy into the European and World market integration. Alternatively, the structural change from unproductive sectors like peasant farming to industrialization also prompted the growth due to increased production rates in the industries.
The imposition of price controls on products was to allow the nation purchase war materials at cheaper costs though the consequences were severe. The controls on food stuff created the scarcity of food so harsh making most the citizens to produce food. Besides, other national purchased food from the neighboring nations through barter trade. However, the growth of the economy improved since the price controls were abolished resulting in reduced cost of products.
Alternatively, the abolition of the socialist system of distribution that had already collapsed because there was nothing to distribute the production of goods was at a standstill. The socialism had to be withdrawn and capitalism, enacted so as to increase the production rates. Through capitalism, the country generated more income, and private ownership of firms improved the production capacities. Similarly, the money supply reduced as a result of the substitution of the currency into smaller units. The currency reform was highly complicated leading to the reduction of the citizens' wealth thus leading to contraction of the money supply.
The price allocation and rationing rules on foodstuffs like vegetables, eggs, fruits and all manufactured products are also reduced. The maximum prices on other products rose significantly, and other remaining controls were not enforced. The decontrol of costs enabled consumers to convey their needs to sellers without a rationing link between them. Besides, the higher prices of commodities encouraged the producers to supply more.
Apart from the currency reform and price decontrol, the g