RENASCENT GERMANY
By M. J. BONN THE visitor to Germany finds a still war-ravaged country. The fields look smiling, apart from being pock-marked by bomb-craters ; but the cities are rubble which has not yet been levelled. The destruction of beauty spots was no doubt accidental and incidental. The American Colonel who said, "One must deprive the Germans of their history," is, let us hope, apocryphal —for enemy-destroyed ruins make better propaganda than unscathed national monuments.
The people are no longer starving, as they were when many had to subsist on a thousand calories in their unheated hovels eighteen months ago—those few who have a little money can feed very well— but nearly all arc underhoused. In the Bizone over two million dwellings, over 23 per cent, of the 9.3 millions available before the war, have been destroyed. A fairly well-to-do couple who have two rooms, one of them serving as kitchen, are rightly envied by those who have to stand in a queue before a joint cooking-range. To get a regular supply of hot water—not to speak of a hot bath—is a dream of a vanished world. The Army of Occupation and the Military Government have not been over-modest in requisitioning living space. And on top of all that seven million refugees and ,deportees have to be quartered in the Bizone. Housing in Germany Is not a question of slums. One might say that all urban Germany is very like a slum.
Few individuals of advanced age can face the future with any sort of confidence. Well-earned pensions are not paid ; 45 per cent. of the refugees in Schleswig-Holstein are unable to earn their living ; a refugee in Bavaria has to subsist on 45 marks a month. There Is more poverty and misery in present-day Germany than any believer in the educational value of an eye for an eye and a tooth for a tooth can desire, and yet there is no blank despair. The miracle of the currency reform turned the tide. It made manifest Germany's appalling poverty. It cut the value of cash and bank deposits by over 90 per cent. ; it reduced bonds, debentures and mortgages at a similar rate. It was the second social revolution Germany had undergone within twenty-five years, more brutal than It need have been, on account of American doctrinairism, which increased the number of people who have to be maintained by the State. But it abolished a currency which no longer fulfilled its functions. It ended hoarding and restricted the black market ; it made the peasants offer food ; the hens again laid eggs, and the cows gave milk. Barter dropped, production got under way till it reached 87 per cent, of the 1936 standard.
With the issue of the new money the price-stop, which had been maintained for three years after the war, was abolished. The nation which had invented planning returned to a market economy at a time when its capitalist basis had been almost destroyed. It may have gone too fast, if not too far. When the hoarded stocks had been absorbed, production could not immediately fill the gap. Some prices had fallen ; others had risen, since world security had kept the cost of imports above the German stop-price level. When world-market prices were charged for those goods, costs of living went up and wages had to follow. The suction power of money was not sufficient to draw adequate quantities of goods out of the pro- duction-process rapidly.
The boldness of Germany's new economic policy can only be explained by her desperate situation. Her problem is a multiple of Great Britain's. Like Britain, she cannot feed her people without imports of foodstuffs and raw materials. But her foreign investments, her merchant marine and her patents have disappeared. She has no gold reserve. She is not permitted to produce certain profitable key commodities ; her industrial output has been deliberately re- stricted. Some of her best plants have been removed or are being dismantled. She has no colonial resources. A fifth of her territory has been cut off " provisionally " ; seven million people from there and from satellite countries have been dumped on the Bizone. Germany had be.sn split into four parts, each of which was run originally in the interest of the Occupying Power ; it is only lately that the three Western zones have been reunited, though not yet completely. The Eastern zone with over 17 million inhabitants, which jointly with the lost lands had been the bread-basket of the West, has been cut off and sovietised to a considerable degree.
The German people have actually faced starvation ; they know that full employment and high social benefits do not provide food. There is no pool of wealth in their country which they can drain ; and they understand that Marshall aid is not given to them in recompense for their civic virtues. They must work as they have never worked before. They are prepared to face unemployment—it reached x,3oo,000 in May—as an incident to recovery. But they cannot understand why a British Labour Government insists on taking away their livlihood by dismantling plants the output of which would save dollars and which give employment. It must know, they think, that their labour cannot be transferred elsewhere, for they have to stick to the hovels which house them. They have to fight the Communists, who pose as champions of a united Germany and are circulating a new hymn of hate: "You strangle our trade and you scrap our works To kill our competition.
Our hate is rising mountain high.
Your realm's on the road to perdition ! You infernal gangsters, you birds of prey. But the time is coming when you will pay. Down with England! "
It unfortunately reflects the almost universal conviction that dis- mantling is not in reality a measure of security. Yet so far common sense has prevailed, though irresponsible persons have been talking of a general strike. The people know that they cannot afford that luxury.
The first thing Germany means to do is to grow more food. She hopes to cover in due time 8o per cent. of her needs. It cannot be done by breaking up the few relatively large estates, for large estates can feed more people than the small holdings which dilettante reformers advocate. It is to be done partly by settling efficient Eastern - refugees on farms which become vacant from natural causes (there will be about 8o,000 of them) and by intensification all round. The many farms scattered in small lots are to be consolidated.
The prerequisite of recovery is capital—capital in the shape of equipment or of its physical components. Paper money, or bank credit dressed up as capital by being charged per cent. interest, is not an adequate substitute for real saving. But the scope for saving is limited. Incomes are too low—only i milliard out of the 8 milliard Deutschemarks to be invested in 1949/50 can be saved by the public ; 2.3 milliards will come from Marshall aid and similar grants, i milliard from banks ; the rest will be raised by taxes or by price charges from consumers, for the savings of concerns are derived from prices which yield more than normal profits. Both methods raise costs of production and reduce an industry's com- petitive potential.
Germany will not have a balanced economy when Marshall aid comes to an end. Her people do not look for a continuation of doles ; they are prepared to accept help on a business basis. Half, if not more, of the German voters are Socialists. They have to use old slogans in order to fight the Communists—though for the time being the latters' number is small. But unlike their British colleagues, they do not cherish the illusion that one can work out one's salvation by shorter hours and less intensive labour. They still believe in nationalisation, but they are not going to nationalise industries at a loss to taxpayers or consumers. They may do it after they have reached Utopia, but they are pretty sure that it will not get them there. They look upon British Socialists as rather naive "beginners," who perhaps can afford expensive experiments ; they cannot. They mean to solve their dollar problem by producing dollar-sought goods, for both the survival of Western Germany and the ultimate re-union with the Eastern zone depend on hard work and not on slogans. They hope they can do it, provided foreign controls do not stifle their efforts. They are handicapped in many ways, but they are ready to face competition, even though it may mean low prices and low wages. Their currency is over-valued ; but as they are depen- dent on excess imports, they are prepared to stick to it. It is, moreover, slowly rising ; it has not yet reached the nominal par of 30 dollars to loo marks, but it has gone up to nearly 20; a year ago it was as low as so. They would accept its convertibility any day were their economic masters to decide that the time was ripe for it. Even the Socialists have little love left for coercive economics ; they got their full share of it under Hitler and under the first three years of Allied administration. They are searching for newer ways for social reform than those followed in the days when they were an irresponsible minority, which could afford to draft programmes for a very distant future. The readiness of the Germans to run appalling risks might encourage other much more favourably situ- ated nations to face realities and not seek salvation in obstinate complacency.
Previous page
