The West German 'economic miracle'.

The West German 'economic miracle'.

• 1945, the whole country had been occupied by foreign troops, and most German cities had been devastated by Allied bombing.
• By the 1960s it had experienced rapid economic recovery.
• 1970, West Germany was the world's third largest economy.
• Real economic growth from 1951 to 1960 averaged 8% per year, Inflation was kept low at an average of 1.1%.
• Germany's machine tool industry had increased by 75% since 1938, this was an important sector of the pot-war sector of the post-war West German economy.

An ample labour supply.

• Germany still possessed an educated, skilled work force, 'human capital'.
• Between 1949 and the building of the Berlin Wall in 1961, 3.8 million Eastern Germans fled the GDR for West Germany.
• Late 1950s, 'guest-worker' (Gastarbeiter) scheme, by 1966 foreign workers numbered at 1.2 million.
• FRG actively recruited specific types of worker, these workers made up for labour shortages in industries such as mechanical and electrical engineering. 
• Provided cheap labour in declining industries, helped maintain German economic competitiveness against its international rivals.

Social market economy.

• A middle way between unregulated private enterprise and a state-controlled economy.
• Aim was to allow private enterprise but also allow…