From Enlightened Hegemony to Partnership - The United States and West Germany in the World Economy, 1945-1968

Summary

The United States was the dominant political and economic power in the Western world in the postwar years. The states of Western Europe were dependent upon it. One example of this dependence was the “dollar gap” that forced them to rely on American aid to finance indispensable imports. For Western Germany as an occupied territory, dependence in this case meant being at the mercy of the occupying powers, and the United States soon set the tone among those powers.

As is always the case in such situations, the United States took advantage of this position of dominance to achieve objectives of its own. It was in the Americans' interest to eliminate discrimination against their exports and establish a liberal, multilateral world economy. It was thus necessary from the American perspective that an economically strong West Germany be integrated within that economy. Marshall Plan aid was one of the levers used by the United States to set the process in motion. By means of that lever, the United States set Western Europe moving toward liberalization and persuaded France to accept the creation of a Western state on German soil that would grow in economic strength. In Western Germany itself, the United States also made an effort toward the permanent reduction of concentrations of economic power by insisting that competition and market mechanisms be strengthened. In this way, the United States laid the essential foundations of the social market economy in the Federal Republic.