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August 16, 2004

Allied Occupation of Germany 1045-48--Incompetence

I was just reading about the Allied Occupation of Germany after World War II. By 1948, industrial production was still less than half of the 1938 amount, despite the higher population. Much (all?) of this was due to the incompetence of the Occupation authorities, who continued the wartime price freeze, which led to the breakdown of the monetary economy and heavy resort to the black market and to barter. Even the Occupation authorities relied on barter: the fringe benefit of a noontime meal was often more important than the frozen salary. In 1948 most price controls were removed, and the economy started to recover.

Posted by erasmuse at August 16, 2004 08:09 PM

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