What if Germany had taken a Marshall Plan approach to rebuilding eastern Germany following reunification?
- Anonymous5 days ago
It did. The Marshall Plan approach was for the US government to invest heavily in rebuilding Western Europe, the US government investing $15 billion in that effort, the point being to make Western Europe strong again quickly rather than let it remain weak and vulnerable, which could result in the US being dragged into a WWIII to defend her again.
After reunification, the German government did likewise, pouring DM 350 billion into what had been East Germany in the first few three alone, a sum far greater than the US's $15 billion investment in Western Europe, even when you account for inflation. The payoff, however, wasn't the same because East Germany was very different than Western Europe.
East Germany had always been poor, the poorest part of Germany, long before World War II. That DM 350 billion spent by the German government on former-East Germany wasn't an investment into a land and people that just a few years before had been prosperous, strong, and thriving— that prosperity, strength, and thrive only recently having been brought down by a relatively short war, because 6 years isn't that long comparatively and isn't long enough for a people to not remember who and what they were, societal memory remaining fully intact. Rather, the region that became East Germany had never been thriving, prosperous, or strong but had always been the poorest part of Germany. Even after the Soviet rebuilding of East Germany, its communist economy never stood on its own two feet but was continually being subsidized by the Soviet Union to stay afloat. Because of the Soviet union pouring so much into East Germany and its communist economy, East Germany's communist economy did stay afloat and the East German government was able to go on for a very long time, more than 40 years, which isn't just some 6-year jaunt but long enough for society to forget as children had been born and reached middle-age without any memory of life before communist East Germany, especially since a pointed effort was made to make society forget, banning any discussion of what life was like before East Germany, most especially what capitalism was like, unless it painted a dismal picture of capitalism.
It's because of all of this that private investment in East Germany didn't follow, unlike what happened with the Marshall Plan, which triggered massive private investment. Private investment in Western Europe skyrocketed with the US government investment by the Marshall Plan. The Marshall Plan sent a signal that it was going to be a quick return to business as usual in Western Europe, so hundreds of millions of dollars in private investment followed that $15 million investment by the US government. But private investors weren't so quick to invest in East Germany after reunification. To the contrary, they were extremely reluctant. That's because there was no return to business as usual because business as usual had been communism for the past 40 plus years, and before that, business as usual was very little business but mass poverty and lack of prosperity. There was no historical basis upon which private investors could look and feel at all confident about. As a result, the East German economy only grew by about 1% in the years after reunification, despite the truly massive investments made by the German government.
You see, resources alone wouldn't fix the problem, not like in Western Europe, because East Germans weren't returning to what they recently were but were being asked to become something they never were: prosperous capitalists.
Finally, there's one more reason the German government investing in what had been East Germany prior to reunification isn't the same as the US government investing in Western Europe: Germany was making an investment into itself, while the US wasn't but was investing in foreign countries. That sends a different message to private investors, because the US's foreign investment tells private investors that a foreign government has significant faith that the investment will yield the rewards it seeks, which was a return to economic and military strength, but the German government dumping DM 350 billion in former East Germany was its duty, its obligation, and didn't signal to private investors that there was any faith that it would necessarily pay off, only signaled that Germany was doing what it must, and possibly signaled to some that the German government was doing so because it knew East Germany couldn't do it on its own, thus signaling a lack of confidence to private investors. Private investors didn't see it so much as an investment but as a liability, and they wanted return on their investment, not to lose their money by pouring it into a money pit that they perceived in even the German government was believing it to be, so private investors lacked confidence and would sit back to wait and see if East Germany would spring up and prosper, but because private investors did so, because private investors did not follow the German government's investment with investment of their own that far surpassed it like private investors did in response to the Marshall Plan, East Germany didn't spring up and prosper but floundered with lackluster growth of only 1% despite DM 350 billion being poured in, a self-fulfilling prophecy of sorts.
So, the two cannot be fairly compared because one is an investment paid by a foreign government into lands that had recently prospered and thrived, while the other is liability paid domestically by a land's own government that hadn't recently prospered or thrived or ever prospered or thrived.
- Anonymous5 days ago
The point of the MP was to ensure that countries needing aid became democratic. Since the reunification, Germany is now all democratic anyway, that doesn't really make a lot of sense. West Germany was wealthy enough to finance reunification and content to bear the cost of freeing GDR of Soviet Control