89-568: The Wirtschaftswunder ( German: [ˈvɪʁt.ʃaftsˌvʊndɐ] , "economic miracle"), also known as the Miracle on the Rhine , was the rapid reconstruction and development of the economies of West Germany and Austria after World War II . The expression referring to this phenomenon was first used by The Times in 1950. Beginning with the replacement of the Reichsmark with
178-490: A medium of exchange with a credit or debit value accepted within the network, such as a unit of currency. A planned economy is one where political agents directly control what is produced and how it is sold and distributed. A green economy is low-carbon and resource efficient. In a green economy, growth in income and employment is driven by public and private investments that reduce carbon emissions and pollution, enhance energy and resource efficiency , and prevent
267-514: A metric such as silver, bronze, copper, etc. A barley/shekel was originally both a unit of currency and a unit of weight, just as the British Pound was originally a unit denominating a one-pound mass of silver. Most exchange of goods had occurred through social relationships. There were also traders who bartered in the marketplaces. In Ancient Greece , where the present English word 'economy' originated, many people were bond slaves of
356-575: A cause of deep and lasting resentment for him. Other reasons for the omission included the longstanding personal mutual antagonism between Roosevelt and de Gaulle, ongoing disputes over the French and American occupation zones, and the anticipated conflicts of interest over French Indochina . It also reflected the judgement of the British and the Americans that French aims, with respect to many items on
445-414: A customs union with France until 1959, and France extracted coal from the area until 1981. West Germany proceeded quickly after 1948 to rebuild its capital stock and thus to increase its economic output at stunning rates. The very high capital investment rate thanks to low consumption and a very small need for replacement capital investments (due to the still small capital stock) drove this recovery during
534-529: A decree abolishing price controls . This move was conducted without the permission of the Allied occupying powers, and was opposed by the Social Democratic Party , most West German manufacturing interests, and according to Erhard, at least some of his own advisers. At the time, food was difficult to find in stores at the artificially low price, and was instead often acquired by barter or through
623-513: A global information society as understanding of a new type of "all-connected" society is created. In the late 2000s, the new type of economies and economic expansions of countries like China , Brazil , and India bring attention and interest to economies different from the usually dominating Western-type economies and economic models. A market economy is one where goods and services are produced and exchanged according to demand and supply between participants (economic agents) by barter or
712-417: A hunch that Stalin is not that kind of a man.... I think that if I give him everything I possibly can and ask for nothing from him in return, 'noblesse oblige', he won't try to annex anything and will work with me for a world of democracy and peace." While a United States Senator and later as Vice President , Truman had closely followed the Allied progress of the war. George Lenczowski noted that "despite
801-659: A meeting of the three governments to occur in June. Truman hoped for Stalin to propose the meeting so as to avoid the appearance that the Americans and British were ganging up on the Soviets. With some prompting from Truman's aide Harry Hopkins , Stalin proposed a meeting in the Berlin area. Informed of this by the US, Churchill sent a letter agreeing that he'd be happy to meet in "what is left of Berlin". Some sources suggest Truman delayed
890-818: A peace treaty for Italy , combined with the disposition of any former Italian territories. In September, the Council of Ministers of Foreign Affairs would examine the question of the Italian territory. At the conference, the Allied leaders confirmed their previous commitment to the removal of German populations from Poland, Czechoslovakia, and Hungary, which the provisional governments of those countries had already begun to put into effect. The three allied leaders agreed that transfers of German civilians should proceed in an orderly and humane manner, but according to modern estimates, between 600,000 and 2.2 million Germans died during
979-626: A profound effect on the socioeconomic and cultural conditions starting in the United Kingdom , then subsequently spreading throughout Europe , North America , and eventually the world. The onset of the Industrial Revolution marked a major turning point in human history; almost every aspect of daily life was eventually influenced in some way. In Europe wild capitalism started to replace the system of mercantilism (today: protectionism ) and led to economic growth . The period
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#17327725943751068-506: A similar period of economic growth . The era of economic growth raised West Germany and Austria from total wartime devastation to developed nations in modern Europe . At the founding of the European Common Market in 1957, West Germany's economic growth stood in contrast to the struggling conditions at the time in the United Kingdom . The fundamental reason for the quick economic recovery of West Germany can be found in
1157-513: A state. The first economist in the true modern meaning of the word was the Scotsman Adam Smith (1723–1790) who was inspired partly by the ideas of physiocracy , a reaction to mercantilism and also later Economics student, Adam Mari. He defined the elements of a national economy: products are offered at a natural price generated by the use of competition - supply and demand - and the division of labor . He maintained that
1246-590: A wide swath across the German tax system at the time of the currency reform." Individual income tax rates, in particular, fell dramatically. Previously the tax rate on any income over 6,000 Deutschmark had been 95 percent. After tax reform, this 95 percent rate applied only to annual incomes above 250,000 Deutschmark. For the West German with an annual income of about 2,400 Deutschmark in 1950, the marginal tax rate fell from 85 percent to 18 percent. Erhard also issued
1335-407: Is a social domain of interrelated human practices and transactions that does not stand alone. Economic agents can be individuals, businesses , organizations , or governments . Economic transactions occur when two groups or parties agree to the value or price of the transacted good or service, commonly expressed in a certain currency . However, monetary transactions only account for a small part of
1424-460: Is also applied in philosophy to designate the fading of postmodernism in the late 90s and especially in the beginning of the 21st century. With the spread of Internet as a mass media and communication medium especially after 2000–2001, the idea for the Internet and information economy is given place because of the growing importance of e-commerce and electronic businesses, also the term for
1513-466: Is called Keynesianism in his honor. In the late 1950s, the economic growth in America and Europe—often called Wirtschaftswunder (German for economic miracle ) —brought up a new form of economy: mass consumption economy . In 1958, John Kenneth Galbraith (1908–2006) was the first to speak of an affluent society in his book The Affluent Society . In most of the countries the economic system
1602-704: Is called a social market economy . With the fall of the Iron Curtain and the transition of the countries of the Eastern Bloc towards democratic government and market economies, the idea of the post-industrial society is brought into importance as its role is to mark together the significance that the service sector receives instead of industrialization. Some attribute the first use of this term to Daniel Bell's 1973 book, The Coming of Post-Industrial Society , while others attribute it to social philosopher Ivan Illich's book, Tools for Conviviality . The term
1691-568: Is called the Industrial Revolution because the system of production and division of labor enabled the mass production of goods . The contemporary concept of "the economy" wasn't popularly known until the American Great Depression in the 1930s. After the chaos of two World Wars and the devastating Great Depression, policymakers searched for new ways of controlling the course of the economy. This
1780-627: Is derived from the Middle French 's yconomie , which itself derived from the Medieval Latin 's oeconomia . The Latin word has its origin at the Ancient Greek 's oikonomia or oikonomos . The word's first part oikos means "house", and the second part nemein means "to manage". The most frequently used current sense, denoting "the economic system of a country or an area", seems not to have developed until
1869-722: Is exchanged. Due to the growing importance of the financial sector in modern times, the term real economy is used by analysts as well as politicians to denote the part of the economy that is concerned with the actual production of goods and services, as ostensibly contrasted with the paper economy , or the financial side of the economy, which is concerned with buying and selling on the financial markets. Alternate and long-standing terminology distinguishes measures of an economy expressed in real values (adjusted for inflation ), such as real GDP , or in nominal values (unadjusted for inflation). The study of economics are roughly divided into macroeconomics and microeconomics . Today,
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#17327725943751958-559: Is not afraid of celebrating occasionally on a grander scale. Productivity growth in West Germany enabled most workers to obtain significant improvements in their living standards and 'security of life.' David Eversley wrote: As real incomes rose, so public authorities were enabled (and indeed encouraged) to raise funds, both from taxation and through borrowing, to accelerate the rate of investment and current spending in projects which are partly immediately productive, partly conducive to
2047-681: Is often associated with the West German Wirtschaftswunder . Austria was also included in the Marshall Plan and can thus be included in any consideration of the Wirtschaftswunder . Through the nationalisation of key industries ( VOEST , AMAG , Steyr-Puch ) and yet more long working hours, full economic capacity was reached. Using West Germany as a guide, the currency was stabilised when the Schilling
2136-469: Is studied at the regional and national levels, and common analyses include income and production, money, prices, employment, international trade, and other issues. Potsdam Conference The Potsdam Conference ( German : Potsdamer Konferenz ) was held at Potsdam in the Soviet occupation zone from July 17 to August 2, 1945, to allow the three leading Allies to plan the postwar peace, while avoiding
2225-579: The Council of Foreign Ministers , which the conference established. The conference ended with a stronger relationship among the three governments as a consequence of their collaboration, which renewed confidence that together with the other United Nations, they would ensure the creation of a just and enduring peace. Nevertheless, within 18 months relations had deteriorated and the Cold War had emerged. In May 1945, Churchill wrote to Truman hoping to arrange
2314-530: The Deutsche Mark in 1948 as legal tender (the Schilling was similarly re-established in Austria), a lasting era of low inflation and rapid industrial growth was overseen by the government led by West German Chancellor Konrad Adenauer and his Minister of Economics, Ludwig Erhard , who went down in history as the "father of the West German economic miracle." In Austria, efficient labor practices led to
2403-613: The People's Republic of Poland , the People's Republic of Bulgaria , the People's Republic of Hungary , the Czechoslovak Socialist Republic , the People's Republic of Romania , and the People's Republic of Albania . Many of those countries had seen failed Socialist revolutions prior to World War II . Regarding the establishment of the Oder–Neisse line , President Truman reported that Stalin had presented
2492-506: The freeholders . The economic discussion was driven by scarcity . In Chinese economic law, the huge cycle of institutional innovation contains an idea. Serving a non-market economy promotes a firm's tenure that is legally guaranteed and protected from bureaucratic opportunities. In the Middle Ages, what is now known as an economy was not far from the subsistence level. Most exchange occurred within social groups . On top of this,
2581-490: The loss of biodiversity and ecosystem services . A gig economy is one in which short-term jobs are assigned or chosen on-demand. The global economy refers to humanity's economic system or systems overall. An informal economy is neither taxed nor monitored by any form of government. The economy may be considered as having developed through the following phases or degrees of precedence: In modern economies, these phase precedences are somewhat differently expressed by
2670-410: The ordoliberal growth model. Germany had a skilled workforce and a high technological level in 1946, but its capital stock had largely been destroyed during and after the war. This small capital stock was compounded by the difficulty in converting the German economy to the production of civilian goods, as well as rampant monetary and regulatory problems, leading to an unusually low economic output during
2759-524: The three-sector model : Other sectors of the developed community include: The gross domestic product (GDP) of a country is a measure of the size of its economy, or more specifically, monetary measure of the market value of all the final goods and services produced. The most conventional economic analysis of a country relies heavily on economic indicators like the GDP and GDP per capita . While often useful, GDP only includes economic activity for which money
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2848-722: The 1650s. As long as someone has been making, supplying and distributing goods or services, there has been some sort of economy; economies grew larger as societies grew and became more complex. Sumer developed a large-scale economy based on commodity money , while the Babylonians and their neighboring city states later developed the earliest system of economics as we think of, in terms of rules/laws on debt , legal contracts and law codes relating to business practices, and private property. The Babylonians and their city state neighbors developed forms of economics comparable to currently used civil society (law) concepts. They developed
2937-561: The 1950s. Living standards also rose steadily, with the purchasing power of wages increasing by 73% from 1950 to 1960. As noted by the British journalist Terence Prittie in the early 1960s: Today the German working-man leads a comfortable life and wears a well-filled waistcoat. He eats well, and his food – although German cooking lacks the elegance of French – is wholesome and appetizing. He buys good clothes, and he dresses his wife and children well. He generally has money to spare for television sets, week-end excursions and football matches. And he
3026-684: The Allied Control Commissions in Romania, Bulgaria, and Hungary had communicated to their British and Americans colleagues proposals for refining the work of the Control Commission since the war in Europe had ended. The three leaders agreed on the revision of the procedures of the commissions in these countries and took into consideration the interests and responsibilities of their own governments, which together presented
3115-680: The Baltic Sea. The area would pass from the eastern shore of the Bay of Danzig to the east, north of Braunsberg and Goldap, to the meeting point of the frontiers of Lithuania, the Polish Republic, and East Prussia. After the conference considered the Soviet recommendation, it agreed for the city of Königsberg and the area next to it to be transferred to the Soviet Union. Truman and Winston Churchill guaranteed that they would support
3204-584: The French refused to resettle any Germans expelled from the east. Moreover, the French did not accept any obligation to abide by the Potsdam agreements in the proceedings of the Allied Control Council. In particular, it reserved the right to block any proposals to establish common policies and institutions across Germany as a whole and anything that could lead to the eventual emergence of a unified German government. The Soviet Union proposed for
3293-475: The German surrender and for the next two years, the U.S. pursued a vigorous program of intellectual reparations through Operation Paperclip. John Gimbel's book Science Technology and Reparations: Exploitation and Plunder in Postwar Germany concludes the "intellectual reparations" taken by the U.S. and the United Kingdom amounted to close to $ 10 billion. During the more than two years that this policy
3382-843: The Spanish government, which had been established with the support of the Axis powers. In addition to the Potsdam Agreement, on 26 July, Churchill; Truman; and Chiang Kai-shek , Chairman of the Nationalist Government of China (the Soviet Union was not yet at war against Japan), issued the Potsdam Declaration, which outlined the terms of surrender for Japan during World War II in Asia. Truman had mentioned an unspecified "powerful new weapon" to Stalin during
3471-539: The U.S. was about to use a new kind of weapon against the Japanese. Though this was the first time the Soviets had been officially given information about the atomic bomb, Stalin was already aware of the bomb project, having learned about it through espionage long before Truman did. Key final decisions included the following: Germany would be divided into the four occupation zones (among the three powers and France) that had been agreed to earlier; Germany's eastern border
3560-570: The USSR, while the Red Army also occupied Poland, Czechoslovakia, Hungary, Bulgaria, and Romania. Refugees fled from those countries. Stalin had set up a puppet communist government in Poland, insisted that his control of Eastern Europe was a defensive measure against possible future attacks, and claimed that it was a legitimate sphere of Soviet influence. Winston Churchill , who had served for most of
3649-607: The United Nations will be effected by a decision of the General Assembly upon the recommendation of the Security Council. The leaders declared that they were willing to support any request for membership from states that had remained neutral during the war and fulfilled the other requirements. The Big Three felt the need to clarify that they were reluctant to support application for such membership from
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3738-605: The United States "had a new weapon of unusual destructive force", but Stalin had full knowledge of the atomic bomb's development from Soviet spy networks inside the Manhattan Project and told Truman at the conference that he hoped Truman "would make good use of it against the Japanese." The Soviet Union converted several countries of Eastern Europe into satellite states within the Eastern Bloc , such as
3827-470: The West German coal and steel industries decided at the Potsdam Conference was virtually completed by 1950; equipment had then been removed from 706 manufacturing plants in the west and steel production capacity had been reduced by 6,700,000 tons. Although the industrially important Saarland with its rich coal fields was returned to West Germany in 1957, it remained economically integrated in
3916-597: The agreement of the Yalta Conference that there should be periodic meetings among the foreign secretaries of the three governments. According to the text of the agreement for the establishment of the council, this was decided: The Conference agreed to apply common policies for determining, at the earliest opportunity, the terms of the peace. In general, the Big Three desired that dispositions of Italy, Bulgaria, Finland, Hungary, and Romania should be resolved by
4005-484: The authority of Karl Renner 's provisional government to be extended to all of Austria. The Allies agreed to examine the proposal after British and American forces entered Vienna . The Soviet Union proposed to the Conference for the territorial questions to be resolved permanently after peace was established in those regions. More specifically, the proposal referred to the section of the western Soviet border near
4094-415: The basic motive for free trade is human self-interest. The so-called self-interest hypothesis became the anthropological basis for economics. Thomas Malthus (1766–1834) transferred the idea of supply and demand to the problem of overpopulation . The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture , manufacturing , mining , and transport had
4183-403: The black market. Once the price controls were removed, the shortages disappeared and the economy improved dramatically. The removal of price controls returned supply and demand to equilibrium. Once the goods could be sold for the higher price that reflected the cost of production, it incentivized producers to increase production, ultimately increasing economic efficiency. The Allied dismantling of
4272-627: The challenge of the relationship between the two emerging superpowers. Both leading powers continued to portray a cordial relationship to the public, but suspicion and distrust lingered between them. Despite this, on 17 July, the first day of the conference, Truman noted "I can deal with Stalin. He is honest — but smart as hell." Truman was much more suspicious of the Soviets than Roosevelt had been and became increasingly suspicious of Stalin's intentions. Truman and his advisers saw Soviet actions in Eastern Europe as aggressive expansionism, which
4361-720: The conference also included establishing the postwar order, solving issues on the peace treaty, and countering the effects of the war. The foreign ministers and aides played key roles: Vyacheslav Molotov , Anthony Eden and Ernest Bevin , and James F. Byrnes . From July 17 to July 25, nine meetings were held, when the Conference was interrupted for two days, as the results of the British general election were announced. By July 28, Attlee had defeated Churchill and replaced him as Britain's representative, with Britain's new Secretary of State for Foreign Affairs, Ernest Bevin, replacing Anthony Eden. Four days of further discussion followed. During
4450-556: The conference in order for it to meet after the results of the first atomic bomb test were known. The conference was eventually set to begin July 16 at Cecilienhof in Potsdam, near Berlin. A number of changes had taken place in the five months since the Yalta Conference and greatly affected the relationships among the leaders. The Soviets occupied Central and Eastern Europe. The Baltic states were forcibly reincorporated into
4539-437: The conference's agenda, were likely to contradict agreed-upon Anglo-American objectives. At the end of the conference, the three heads of government agreed on the following actions. All other issues were to be resolved by the final peace conference, which was to be called as soon as possible. France, having been excluded from the conference, resisted implementing the Potsdam agreements within its occupation zone. In particular,
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#17327725943754628-490: The conference, there were meetings of the three heads of government with their foreign secretaries, as well as meetings of only the foreign secretaries. Committees that were appointed by the latter for precursory consideration of questions before the conference also met daily. During the Conference, Truman was secretly informed that the Trinity test of the first atomic bomb on July 16 had been successful. He hinted to Stalin that
4717-517: The conference. Towards the end of the conference, on July 26, the Potsdam Declaration gave Japan an ultimatum to surrender unconditionally or meet "prompt and utter destruction", which did not mention the new bomb but promised that "it was not intended to enslave Japan". The Soviet Union was not involved in that declaration since it was still neutral in the war against Japan. Japanese Prime Minister Kantarō Suzuki did not respond, which
4806-407: The contrast between his relatively modest background and the international glamour of his aristocratic predecessor, [Truman] had the courage and resolution to reverse the policy that appeared to him naive and dangerous," which was "in contrast to the immediate, often ad hoc moves and solutions dictated by the demands of the war." With the end of the war, the priority of Allied unity was replaced by
4895-469: The creation of the good life, as seen in Germany ... Any superficial examination of the German townscape, let alone perusal of the statistics, shows that Germany has spent sums on hospitals, libraries, theaters, schools, parks, railway-stations, socially-aided housing, underground railways, airports, museums, and so on which are simply not to be compared with British efforts in this direction. As since there
4984-534: The economic domain. Economic activity is spurred by production which uses natural resources, labor and capital. It has changed over time due to technology , innovation (new products, services, processes, expanding markets, diversification of markets, niche markets, increases revenue functions) and changes in industrial relations (most notably child labor being replaced in some parts of the world with universal access to education ). The word economy in English
5073-519: The economic rehabilitation of Germany". At the same time, the government, following Erhard's advice, cut taxes sharply on moderate incomes. Walter Heller , a young economist with the U.S. occupation forces who was later to become chairman of the Council of Economic Advisers under President of the United States John F. Kennedy , wrote in 1949 that to "remove the repressive effect of extremely high rates, Military Government Law No. 64 cut
5162-468: The end of the negotiations. They believed that the other Allies would share their point of view. As the disposition of Italy was one of the most important issues that required the attention of the new Council of Foreign Ministers, the three governments were especially concerned with concluding a peace treaty with Italy, especially as it had been the first of the Axis powers to break with Germany and to participate in Allied operations against Japan. Italy
5251-695: The first stock exchange was founded in Antwerp . Economy at the time meant primarily trade . The European captures became branches of the European states, the so-called colonies . The rising nation-states Spain , Portugal , France , Great Britain and the Netherlands tried to control the trade through custom duties and mercantilism (from mercator , lat.: merchant ) was a first approach to intermediate between private wealth and public interest . The secularization in Europe allowed states to use
5340-477: The first known codified legal and administrative systems, complete with courts, jails, and government records. The ancient economy was based primarily on subsistence farming . The Shekel are the first to refer to a unit of weight and currency, used by the Semitic peoples . The first usage of the term came from Mesopotamia circa 3000 BC. and referred to a specific mass of barley which related other values in
5429-436: The first post-war years. These initial problems were overcome by the time of the currency reform of 1948, which replaced the Reichsmark with the Deutsche Mark as legal tender, halting rampant inflation. This act to strengthen the West German economy had been explicitly forbidden during the two years that JCS 1067 was in effect. JCS 1067 had directed the U.S. forces of occupation in Germany to "take no steps looking toward
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#17327725943755518-596: The flight and expulsions. The leaders decided that the Allied Control Council in Germany would deal with the matter, giving priority to the equal distribution of Germans among the various zones of occupation. Representatives on the Control Council were to report to their governments and to each zonal administration the number of people who had already entered Germany from the eastern countries. The representatives would also form an estimate of
5607-406: The future pace of transfers and focus on the German occupied government's capacity to process new arrivals. The provisional governments of Poland, Hungary, and Czechoslovakia were instructed to temporarily suspend expulsions of German civilians until their respective Control Council representatives had reported these results and estimates. The Big Three took notice that the Soviet representatives on
5696-470: The great conquerors raised what we now call venture capital (from ventura , ital.; risk ) to finance their captures. The capital should be refunded by the goods they would bring up in the New World . The discoveries of Marco Polo (1254–1324), Christopher Columbus (1451–1506) and Vasco da Gama (1469–1524) led to a first global economy. The first enterprises were trading establishments. In 1513,
5785-400: The immense property of the church for the development of towns. The influence of the nobles decreased. The first Secretaries of State for economy started their work. Bankers like Amschel Mayer Rothschild (1773–1855) started to finance national projects such as wars and infrastructure . Economy from then on meant national economy as a topic for the economic activities of the citizens of
5874-528: The locals and for prostitutes. During exercises such numbers of soldiers would swell to over 250,000. Nonetheless, the amount of monetary aid, which was mainly in the form of loans, about $ 1.4 billion, was greatly overshadowed by the amount the Germans had to pay back as war reparations and by the charges the Allies made on the Germans for the ongoing cost of the occupation, about $ 2.4 billion per year. In 1953 it
5963-571: The mistakes of the Paris Peace Conference of 1919 . The participants were the Soviet Union, the United Kingdom, and the United States. They were represented respectively by General Secretary Joseph Stalin , Prime Ministers Winston Churchill and Clement Attlee , and President Harry S. Truman . They gathered to decide how to administer Germany, which had agreed to an unconditional surrender nine weeks earlier. The goals of
6052-484: The peace treaties for Bulgaria , Finland , Hungary , and Romania . The conclusion of peace treaties with recognized and democratic governments in those four countries would allow the Big Three to accept their requests to be members of the United Nations. Moreover, after the termination of peace negotiations, the Big Three agreed to examine in the near future the restoration of the diplomatic relations with Finland, Romania, Bulgaria, and Hungary. The Big Three were sure that
6141-418: The production, use, and management of resources. A given economy is a set of processes that involves its culture , values , education, technological evolution, history, social organization , political structure , legal systems , and natural resources as main factors. These factors give context, content, and set the conditions and parameters in which an economy functions. In other words, the economic domain
6230-471: The proposals of the conference when peace was eventually ensured. The Soviet Union made a proposal to the conference concerning the mandated territories and conformed with what had been decided at the Yalta Conference and the Charter of the United Nations . After various opinions on the question had been discussed, the foreign prime ministers agreed that it was essential to decide at once the preparation of
6319-431: The range of fields of study examining the economy revolves around the social science of economics, but may also include sociology , history , anthropology , and geography . Practical fields directly related to the human activities involving production , distribution , exchange , and consumption of goods and services as a whole are business , engineering , government , and health care . Macroeconomics
6408-500: The situation in Europe after the end of World War II would allow representatives of the Allied press to enjoy freedom of expression in the four countries. Article 4 of the Charter of the United Nations read: 1. Membership in the United Nations is open to all other peace-loving States who accept the obligations contained in the present Charter and, in the judgment of the organization, are able and willing to carry out these obligations; 2. The admission of any such state to membership in
6497-496: The suppression of its economy was holding back the recovery of other European countries and was not the main force behind the Wirtschaftswunder . However, it likely greatly contributed to Germany's overall economic recovery. Furthermore, often overlooked is the effect of the "unofficial contributions" of 150,000 U.S. occupation troops, earning as much as 4 Deutschmark to the dollar. These marks were spent within West Germany to buy food, luxury items, beer and cars, as well as entertaining
6586-432: The terms of the armistice to the occupied countries. The Conference agreed on the establishment of a Council of Foreign Ministers to represent the five principal powers, continue the essential preliminary work for the peace settlements, and assume other matters that could occasionally be committed to the council by agreement of the governments participating it. The establishment of the Council in question did not contradict
6675-419: The value of its exports during and shortly after the war. Apart from these factors, hard work and long hours at full capacity among the population in the 1950s, 1960s and early 1970s and extra labour supplied by thousands of Gastarbeiter ("guest workers", since the late 1950s) provided a vital base for the sustainment of the economic upturn with additional workforce. From the late 1950s, West Germany had one of
6764-640: The votes of armed forces personnel to be counted in their home constituencies. The outcome became known during the conference, when Attlee became the new prime minister. Roosevelt had died on 12 April 1945, and US Vice-President Harry Truman assumed the presidency, which saw VE Day (Victory in Europe) within a month and VJ Day (Victory in Japan) on the horizon. During the war, in the name of Allied unity, Roosevelt had brushed off warnings of potential domination by Stalin over parts of Europe by explaining, "I just have
6853-420: The war as British prime minister in a coalition government , was replaced during the conference by Clement Attlee . Churchill's government had a Soviet policy since the early 1940s that differed considerably from Franklin D. Roosevelt 's and believed Stalin to be a "devil"-like tyrant, who led a vile system. A general election was held in the United Kingdom on 5 July 1945, but its results were delayed to allow
6942-592: The world's strongest economies. The East German economy also showed strong growth, but not as much as in West Germany, due to the bureaucratic system, emigration of working-age East Germans to West Germany, and materiel sent as reparations to the USSR. Unemployment hit a record low of 0.7–0.8% in 1961–1966 and 1970–1971. Ludwig Erhard , who served as Minister of the Economy in Chancellor Adenauer 's cabinet from 1949 until 1963 and later became Chancellor,
7031-544: Was decided that Germany would repay $ 1.1 billion of the aid it had received. The last repayment was made in June 1971. The demands of the Korean War in 1950–53 led to a global shortage of goods that helped overcome lingering resistance to the purchase of West German products. At the time West Germany had a large pool of skilled labour, partly as a result of the deportations and migrations which involved up to 16.5 million Germans. This helped West Germany to more than double
7120-454: Was ensured. In the 1950s the first Gastarbeiter from Southern Italy and Greece arrived in the country, as more manual labour was required to maintain the economic upswing. Economy An economy is an area of the production , distribution and trade , as well as consumption of goods and services . In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with
7209-494: Was explored and discussed by Friedrich August von Hayek (1899–1992) and Milton Friedman (1912–2006) who pleaded for a global free trade and are supposed to be the fathers of the so-called neoliberalism . However, the prevailing view was that held by John Maynard Keynes (1883–1946), who argued for a stronger control of the markets by the state. The theory that the state can alleviate economic problems and instigate economic growth through state manipulation of aggregate demand
7298-539: Was granted an occupation zone within Germany. France was a participant in the Berlin Declaration and was to be an equal member of the Allied Control Council . Nevertheless, at the insistence of the Americans, Charles de Gaulle was not invited to Potsdam — just as he had been denied representation at Yalta — for fear that he would reopen the Yalta decisions. De Gaulle thus felt a diplomatic slight, which became
7387-530: Was in place, new industrial research in Germany was hampered because it was unprotected and freely available to overseas competitors, encouraged by occupation authorities to access all records and facilities. Thousands of the best German researchers and engineers were working in the Soviet Union and in the United States . The Marshall Plan was only extended to Western Germany after it was realized
7476-540: Was incompatible with the agreements committed to by Stalin at Yalta in February. In addition, Truman became aware of possible complications elsewhere after Stalin had objected to Churchill's proposal for an Allied withdrawal from Iran ahead of the schedule that had been agreed at the Tehran Conference . The Potsdam Conference was the only time that Truman met Stalin in person. At the Yalta Conference, France
7565-408: Was interpreted as a sign that the Japanese had ignored the ultimatum. As a result, the United States dropped atomic bombs on Hiroshima on 6 August and on Nagasaki on 9 August 1945. The justifications used were that both cities were legitimate military targets and that it was necessary to end the war swiftly and preserve American lives. When Truman informed Stalin of the atomic bomb, he said that
7654-419: Was making significant progress in gaining its freedom and rejecting the previous fascist regime, and it had paved the way for the re-establishment of democratic governments. If Italy had a recognized and democratic government, it would be easier for the Americans, the British, and the Soviets to support the membership of Italy in the United Nations. The Council of Foreign Ministers also had to examine and prepare
7743-422: Was no army before 1955, there was little war spending. In addition to the physical barriers that had to be overcome for the West German economic recovery, there were also intellectual challenges. The Allies confiscated intellectual property of great value, all German patents, at home and abroad and used them to strengthen their own industrial competitiveness by licensing them to Allied companies. Immediately after
7832-686: Was reintroduced in place of the Reichsmark . This economic policy was known in journalistic circles as the Raab-Kamitz-Kurs , named after Julius Raab , Austrian chancellor from 1953, and his Finance Minister Reinhard Kamitz similar to the West German Adenauer-Erhard-Kurs . Because of major state projects, such as the Kaprun hydroelectric plant and the West Autobahn , unemployment fell and social peace
7921-415: Was to be shifted west to the Oder–Neisse line ; a Soviet-backed group was recognized as the legitimate government of Poland; and Vietnam was to be partitioned at the 16th parallel. The Soviets also reaffirmed their Yalta promise to promptly launch an invasion of Japanese-held areas . Views were also exchanged on a plethora of other questions. However, consideration of those matters was postponed into
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