After the devastation of World War II, Germany and Japan were left in ruins, both economically and physically. Factories, cities, and infrastructure had been obliterated, and the populations of both countries faced significant hardships. Yet within a few decades, both nations had managed to not only recover but also become economic powerhouses. This post-war transformation of Germany and Japan is one of the most significant success stories in modern economic history. The rapid rise of these two countries was due to a complex mix of factors, including effective economic policies, external assistance, social and cultural factors, and the restructuring of their economies.
Germany and Japan shared a number of similarities in their post-war situations. Both were militarily defeated and occupied by foreign powers; Germany by the Allies and Japan by the United States. Both had their industrial capabilities severely damaged, and both countries faced the challenge of rebuilding a shattered economy under conditions of foreign oversight. However, each nation’s path to economic recovery and eventual dominance in global markets also had important differences, rooted in the specifics of their economies, their social structures, and the particular nature of their occupations.
Germany’s economic transformation began shortly after the war, largely thanks to a combination of domestic reforms and external support. The country had been divided into four occupation zones controlled by the United States, the United Kingdom, France, and the Soviet Union. West Germany, which eventually became the Federal Republic of Germany in 1949, was more favourably placed for economic recovery than the Soviet-controlled East Germany. The Marshall Plan, an American initiative to aid Western Europe after the war, played a crucial role in this recovery.
The Marshall Plan injected substantial amounts of financial aid into Western Europe, and West Germany was one of the biggest beneficiaries. Between 1948 and 1952, West Germany received over $1.4 billion in aid, which was used to rebuild infrastructure, revive industry, and stabilise the currency. The economic philosophy of Ludwig Erhard, the country’s first Minister of Economics and later Chancellor, was also a key factor. Erhard advocated for what he called a “social market economy,” a blend of free-market capitalism with social policies that ensured a strong safety net. This approach helped create the conditions for the “Wirtschaftswunder” (economic miracle) of the 1950s and 1960s.
One of the first significant moves made by Erhard was the currency reform of 1948, which replaced the Reichsmark with the Deutsche Mark. This reform tackled hyperinflation and stabilised the German economy by restoring confidence in the currency. At the same time, Erhard abolished price controls, allowing the markets more freedom to function effectively and fostering entrepreneurship and investment. These moves sparked an economic boom in West Germany. By the early 1950s, West Germany’s industrial production had surpassed pre-war levels, and the country was on its way to becoming a major player in global markets.
West Germany’s economic resurgence was also helped by the fact that, despite the destruction caused by the war, much of its industrial know-how and expertise had been preserved. The country had a strong engineering tradition and an educated, disciplined workforce. Key industries, such as steel, chemicals, and machinery manufacturing, quickly recovered and began to export again. The country’s automotive industry, led by companies like Volkswagen, Mercedes-Benz, and BMW, became a global leader in both quality and quantity.
Another important factor in West Germany’s post-war success was its integration into the European and global economy. The establishment of the European Coal and Steel Community in 1951 and the later creation of the European Economic Community (EEC) in 1957 helped ensure that West Germany had access to European markets. This, in turn, stimulated growth and allowed the country to become one of the world’s leading exporters. The combination of domestic reforms, external aid, and integration into international markets transformed West Germany from a shattered post-war economy into one of the world’s most dynamic economies by the 1960s.
Japan’s post-war recovery was similarly dramatic but followed a different path. At the end of World War II, Japan was occupied by American forces, and the country’s economy was in tatters. The US occupation, led by General Douglas MacArthur, introduced a series of political, social, and economic reforms designed to transform Japan into a peaceful, democratic nation. These reforms laid the groundwork for Japan’s post-war economic success.
One of the first major steps taken by the US occupation authorities was the dissolution of the zaibatsu, large industrial conglomerates that had dominated the Japanese economy before the war. These conglomerates were seen as having supported Japan’s militaristic policies, and breaking them up was part of the Allies’ efforts to democratise the Japanese economy. However, in practice, the zaibatsu were replaced by keiretsu, groups of companies linked by cross-shareholding and centred around major banks. These keiretsu played a major role in Japan’s post-war industrialisation.
Like Germany, Japan also benefited from external aid in the immediate post-war period. The United States provided Japan with financial assistance through the Dodge Plan, named after American economist Joseph Dodge, who was tasked with stabilising the Japanese economy. This plan helped curb inflation, stabilise the yen, and restore fiscal discipline. It also laid the foundation for Japan’s future economic growth by prioritising export-led industrialisation.
In addition to external aid, Japan’s government played a central role in fostering economic development. The Ministry of International Trade and Industry (MITI), established in 1949, was instrumental in guiding the country’s industrial policy. MITI worked closely with Japanese industries to promote technological innovation, protect domestic industries, and develop strategic sectors. For example, it played a key role in promoting the automobile and electronics industries, both of which became global leaders in the following decades.
Japan’s focus on export-led growth, combined with its ability to adapt and innovate, helped it rapidly industrialise and become one of the world’s leading economies. Japanese companies, such as Toyota, Honda, Sony, and Panasonic, became household names around the world. The country’s emphasis on high-quality manufacturing, combined with its ability to produce goods at lower costs than many Western competitors, allowed it to dominate key industries such as automobiles, consumer electronics, and semiconductors.
The Korean War (1950-1953) also played a significant role in Japan’s economic recovery. The war created demand for Japanese goods and services, particularly from the United States, which used Japan as a base of operations for its military efforts in Korea. This surge in demand provided a much-needed stimulus to the Japanese economy and helped it recover more quickly than might have otherwise been possible.
Another important factor in Japan’s post-war economic success was the country’s strong social cohesion and work ethic. Japan’s corporate culture emphasised loyalty, discipline, and cooperation, and workers often identified closely with the companies they worked for. The concept of lifetime employment, in which employees would work for a single company for their entire careers, helped create a stable workforce and fostered a sense of commitment to the company’s success. This model, combined with a strong focus on education and skill development, ensured that Japan had a highly skilled and motivated workforce, which was key to its economic success.
Both Germany and Japan also benefited from the geopolitical environment of the Cold War. The United States, fearing the spread of communism in Europe and Asia, was keen to see both countries recover economically. A strong, prosperous West Germany was seen as a bulwark against Soviet influence in Europe, while a strong Japan was viewed as crucial to containing communism in Asia. This strategic interest on the part of the US meant that both countries enjoyed favourable trade policies and continued economic assistance, which further helped them to rebuild and grow their economies.
The success of Germany and Japan as economic powerhouses can also be attributed to their focus on innovation and technological advancement. In both countries, governments and industries invested heavily in research and development, which allowed them to stay at the forefront of technological progress. In Germany, companies like Siemens and Bosch became leaders in industrial technology, while Japan’s emphasis on electronics and automotive innovation propelled it to the forefront of global markets.
In addition to their industrial policies, both Germany and Japan placed a strong emphasis on education and skills training, which helped create a highly skilled workforce capable of driving economic growth. In Germany, the vocational training system, known as the dual system, played a crucial role in ensuring that workers had the technical skills needed by industry. Japan, similarly, prioritised education and technical training, creating a workforce that was both highly skilled and highly disciplined.
The integration of both countries into the global economy was another key factor in their rise as economic powerhouses. Both Germany and Japan pursued export-oriented growth strategies, which allowed them to capitalise on global demand for high-quality manufactured goods. Germany became one of the world’s leading exporters of machinery, automobiles, and chemicals, while Japan became a global leader in automobiles, electronics, and consumer goods. Their ability to compete in global markets was underpinned by their focus on quality, innovation, and efficiency.
By the 1980s, both Germany and Japan were firmly established as global economic powers. West Germany had become one of the world’s leading industrial economies, with a strong export sector and high levels of productivity. Japan, meanwhile, had risen to become the second-largest economy in the world, trailing only the United States. Both countries had succeeded in transforming themselves from war-torn nations into economic powerhouses in just a few decades.
In conclusion, the post-war economic success of Germany and Japan can be attributed to a combination of domestic reforms, external assistance, and integration into the global economy. Both countries benefited from strong government intervention in the economy, particularly in the form of industrial policy and strategic planning. External factors, such as the Marshall Plan and the Korean War, also played a crucial role in their recovery. Additionally, both Germany and Japan had strong traditions of technical expertise, innovation, and social cohesion, which helped them rebuild their economies and become global leaders in manufacturing and technology. Their focus on quality, efficiency, and innovation allowed them to dominate key global markets and establish themselves as economic powerhouses in the post-war world.
According to the German public the following are the best things about post war Germany:
1. High-Quality Education System
Germany is renowned for its excellent public education system, including free or low-cost higher education, even for international students. This accessibility to education is a point of pride.
2. Healthcare System
Germany has a well-established and efficient universal healthcare system, combining public and private insurance models. Germans value the high-quality medical care and access to services.
3. Strong Economy
Germany has one of the strongest and most stable economies in the world. As a leader in industries such as automotive, engineering, and green technologies, many Germans appreciate the country’s economic prowess and job market stability.
4. Environmental Awareness
Germans are highly conscious of environmental issues and are proud of their country’s commitment to sustainability, including its leadership in renewable energy and efforts to combat climate change.
5. Cultural Richness
Germany is home to a rich cultural heritage, with deep contributions to philosophy, classical music, literature, and the arts. Germans take pride in their cultural legacy, including famous figures like Goethe, Beethoven, and Kant.
6. Public Transport and Infrastructure
Germany is known for its efficient public transport, including its world-famous Deutsche Bahn train network and autobahns. Germans appreciate the country’s well-maintained and extensive infrastructure.
7. Social Welfare System
The country has a robust social welfare system, which provides support in terms of unemployment benefits, pensions, and family support programs. This contributes to a relatively low poverty rate and high quality of life.
8. Work-Life Balance
Germans highly value their work-life balance, with regulations ensuring fair working hours, substantial paid vacation time, and family-friendly policies such as parental leave.
9. Democracy and Political Stability
Many Germans value their country’s stable democratic institutions, which have fostered peace, human rights, and a vibrant civil society since World War II.
10. Quality of Life and Safety
Germany is seen as a safe and secure country with a high quality of life, reflected in low crime rates, high living standards, and a well-functioning public safety system.
11. Food and Beer Culture
Germans take pride in their culinary traditions, especially their world-famous beer culture, with events like Oktoberfest. Bread, sausages, and regional cuisines are also highly regarded.
12. Openness and Multiculturalism
Despite historical challenges, modern Germany is viewed as an open and multicultural society. Many Germans value inclusivity, tolerance, and diversity in their cities and workplaces.
13. Pioneering in Science and Technology
Germany is recognized for its contributions to scientific and technological advancements, especially in fields such as engineering, physics, and renewable energy. Many Germans take pride in their country’s reputation for innovation.
14. Respect for Rule of Law and Institutions
Germans generally respect the rule of law and their country’s institutional framework, valuing transparency, anti-corruption efforts, and legal integrity.
15. Historical Reconciliation
Germans also take pride in their country’s efforts to confront and reconcile with its difficult past, especially the crimes of World War II and the Holocaust. The culture of remembrance and the commitment to human rights are significant in shaping modern German identity.
These points reflect key areas that the German public values about their country, often drawing from surveys, media, and public discussions on the topic.
According to the Japanese public the following are the best things about post war Japan:
1. Safety and Low Crime Rate
Japan is considered one of the safest countries in the world. The low crime rate and general sense of security are often mentioned as some of the best aspects of life in Japan, with people feeling comfortable walking in cities even late at night.
2. Politeness and Social Harmony
Japanese society places a high value on politeness, respect for others, and social harmony (often referred to as “wa”). This creates a culture of cooperation and mutual respect, which many Japanese citizens take pride in.
3. Public Transportation
The efficiency, punctuality, and cleanliness of Japan’s public transport system, particularly its trains (like the Shinkansen bullet trains), are often regarded as some of the country’s top achievements. The rail network connects the entire country seamlessly, making travel easy and reliable.
4. Delicious and Healthy Cuisine
Japanese cuisine is a major source of national pride. Whether it’s sushi, ramen, tempura, or traditional kaiseki meals, the diversity, healthiness, and artistic presentation of Japanese food are cherished. Many Japanese people also value the balance of taste, nutrition, and seasonal ingredients in their diet.
5. Rich Cultural Heritage
Japan’s long history and cultural heritage, including its temples, shrines, traditional festivals, and arts like tea ceremony, calligraphy, and ikebana (flower arranging), are among the most appreciated aspects. Many Japanese are proud of the preservation and promotion of traditional culture alongside modernity.
6. Natural Beauty
Japan’s diverse natural landscapes, from iconic Mount Fuji to its beautiful coastlines, forests, and hot springs (onsen), are highly regarded by the Japanese public. The four distinct seasons, especially the cherry blossom season in spring (sakura), are seen as essential parts of the national identity.
7. Cleanliness and Public Order
The cleanliness of public spaces, streets, and infrastructure is a point of pride for many Japanese citizens. The widespread sense of civic duty to keep public areas tidy and organized is appreciated, reflecting a collective responsibility for maintaining order.
8. Universal Healthcare System
Japan’s healthcare system is often viewed positively by its citizens. With universal healthcare and high standards of medical care, the Japanese public appreciates the accessibility and quality of their health services, contributing to the country’s high life expectancy.
9. Respect for Tradition and Modernity
Japanese people take pride in the harmonious coexistence of tradition and modernity in their country. Cities like Kyoto preserve ancient temples and cultural practices, while urban centers like Tokyo embrace cutting-edge technology and modern lifestyles. This blend is seen as a unique and defining feature of Japan.
10. Education System
Japan’s education system is highly valued, especially its focus on discipline, respect, and academic excellence. Japanese citizens appreciate the rigor of their schooling system, which emphasizes both intellectual and character development from a young age.
11. Work Ethic and Professionalism
Japan’s strong work ethic and commitment to professionalism are seen as core national values. While there are ongoing discussions about work-life balance, many Japanese people take pride in their diligence, dedication to their work, and high standards of quality in various industries.
12. Long Life Expectancy and Healthy Living
Japan is known for its long life expectancy, and many Japanese take pride in the health-conscious lifestyle, which includes a diet rich in vegetables, seafood, and fermented foods like miso. Regular physical activity and social engagement among the elderly are also seen as contributing factors.
13. Technological Innovation
Japan is recognized globally for its technological advancements, particularly in fields such as robotics, electronics, and automotive engineering. The public often takes pride in their country’s reputation as a leader in innovation and cutting-edge technology.
14. Onsen (Hot Springs) and Bath Culture
The tradition of bathing in natural hot springs (onsen) is a beloved cultural practice in Japan. Many Japanese people see it as a way to relax, rejuvenate, and connect with nature. Bath culture is an important aspect of Japanese leisure and wellness.
15. Disaster Preparedness and Resilience
Japan is frequently affected by natural disasters, such as earthquakes and typhoons, but the country’s preparedness and ability to recover from these challenges are sources of national pride. The public appreciates the government’s systems for disaster response, as well as the resilience and solidarity of the people in the face of adversity.
16. Convenience Stores (Konbini)
Japanese convenience stores (konbini), such as 7-Eleven, FamilyMart, and Lawson, are praised for their variety, quality, and convenience. Offering everything from fresh meals to banking services, they are seen as essential parts of daily life and are a source of pride for their efficiency and customer service.
17. Respect for Nature
Japan has a deep cultural respect for nature, evident in traditions like “hanami” (cherry blossom viewing), “momiji” (autumn leaf viewing), and even seasonal food. The Japanese public values this close connection with nature and the appreciation of its fleeting beauty.
18. National Unity and Identity
Many Japanese people appreciate the sense of national unity and shared identity, especially during times of celebration or crisis. Events like the Tokyo 2020 Olympics, despite the challenges, fostered a sense of pride in Japan’s international presence and achievements.
19. Punctuality and Efficiency
Punctuality is highly valued in Japanese society, and many take pride in the country’s commitment to time management. Whether it’s public transport, work, or social events, being on time is seen as a mark of respect and professionalism.
20. Strong Sense of Community
The sense of community and collective well-being is an important part of Japanese culture. Whether through neighborhood associations, local festivals, or disaster preparedness efforts, many Japanese citizens take pride in the feeling of social cohesion and helping one another.
These points reflect how the Japanese public views their country’s strengths, with a mix of pride in both cultural heritage and modern accomplishments, all tied together by a shared respect for order, harmony, and innovation.
Both Germany and Japan have benefited enormously by losing World War Two, while those who were perceived as victors are up to their necks in debt. Because of this debt the forces that led to World War Two are growing. The far right are on the march and another world war is getting closer. For those who understand irony, I will leave it there.
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