Success Story

Perhaps the biggest and best news in the world last week concerned Western Germany, on whose battered pits and blast furnaces and factories depend Europe's future and (very likely) the world's peace. Western Germany was what the "Berlin crisis" was all about. The Russians had imposed the Berlin blockade in a desperate attempt to prevent Western German recovery. This Russian plan failed. Just four months after the Western Allies introduced their great currency reform, Western Germany was on its feet again. Its revival was a notable triumph for German energy and for certain Western ideas, including free enterprise.

Last spring, Western Germany's economy was smothered by masses of inflated marks in which no one had any confidence and which bought almost nothing. No one felt like working, or selling, for piles of nearly valueless paper money. In one drastic piece of surgery, Bizonia's economic authorities called in all the old currency, issued only one new mark for ten of the old. Along with this severe bloodletting, the patient was given his economic freedom: all price ceilings were lifted, except for basic foods, coal, iron and steel.

Hurrah for Uncle Autumn. Western Germany last week was full of hope. The summer had been cold and rainy, but it had been followed by a glorious golden autumn. On the freshly harvested fields, which had yielded a bumper crop, children launched their kites into the brisk wind; it seemed, sometimes, as though the gaily colored Drachen rode high enough to touch the C-54s which droned overhead in their ceaseless shuttle to Berlin.

Second-grade pupils were learning a poem which summed up much of Western Germany's mood: "Speckled autumn moves through the country with long steps and mighty hand. It bends the slender trees and it rustles the stout ones. Then the ripe apples and pears and apricots come tumbling down. The boys and girls shout: 'Hurrah, Uncle Autumn is here!'"

The sight of scaffolding, the smell of fresh cement, the sound of winches have become common in cities where until recently weeds had spread a green blanket over the rubble. Large new neon signs began to appear, and at night--when darkness hid the war scars--Frankfurt's Bahnhofsplatz looked like a corner of Times Square. Shop windows were full of goods. Once surly salesmen now treated the customer with the respect due a man who had real money in his pockets.

Machines for Herr Donath. What is left of German industry is working full blast. Production has nearly doubled in a year, is now at 70% of the 1936 level. Coal output has climbed to over 300,000 tons a day. Steel production has risen to a rate of 7,000,000 tons a year.

A good example of what has happened is the Bayerische Motorenwerke, whose automobiles used to be regarded with the same awe in prewar Germany as the Stutz Bearcat in the U.S. of the '20s. Not a single one of the plant's buildings escaped bomb damage; 95% of its remaining equipment was dismantled. "It was all earmarked for India," related Plant Manager Kurt Donath, "but then India was divided into two nations which apparently weren't on the best of terms. Anyway, the representative of one part came here and took all the good machines. Later the representative of the other part came, saw the condition of what was left, and went away in a huff."

No sooner had all the dismantling been finished than Manager Donath started rebuilding. The Motorenwerke made kitchen pots, ovens, potato-planting machines. Finally, Donath wangled some third-rate machines from his uncooperative fellow industrialists, and promptly tackled motorcycles. Last week, production was in full swing. Although many of the buildings still had no roofs, and the golden autumn weather frequently turned chilly, Donath's 1,500 workers cheerfully continued on their jobs.

Said a sheet-metal worker named Anton Schmiesel: "We like this plant. It is our life. We Germans love to work. That is what matters."

Future for a Chauffeur. Before the currency reform, the German love of work was not so apparent. Workers stayed away from their jobs whenever they felt like it. Now absenteeism in many plants is down to 3%. Productivity of the individual worker has risen more than a third.

In the Frankfurt labor office, an official pointed out a typical new job seeker, a young German in a G.I. field jacket, with a strangely old face and shifty eyes. "He used to be a black-market operator," explained the official. "That is what I like to see--when we get black-marketeers offering to do an honest day's work, we know that currency reform has been a success."

A chauffeur who had worked for the U.S. Military Government was looking for a private job--like many other of Military Government's "indigenous personnel." Jobs with the "Amis" (as the Americans are known in German slang) had been popular chiefly because of the one hot meal a day they offered. Now people could buy their own meals. Said the chauffeur: "I'll be with a German company where I'll have a future."

Companions, for a Comrade. Grave problems remain. Perhaps the most important is the fact that the new free economy is at war with the remnants of controlled economy. Wages are still frozen, while most prices are rising freely. Many Germans have gone on buyers' strikes; last week 5,000 workers in Stuttgart pledged not to drink beer until the price, which had recently doubled, came down.

Another trouble is what Thorstein Veblen called conspicuous waste--which has always been especially conspicuous among well-to-do German burghers and officials. Today they again infuriate the people by riding about in huge cars surrounded by chauffeurs and flunkies, and eating in the most expensive restaurants. The Communist leaders, who are fighting the economic reforms tooth & nail, are no exception. Silver-haired, well-tailored Communist Boss Max Reimann dashes about Frankfurt in a Maybach convertible, usually accompanied by attractive young women.

Chance for the Professor. The man chiefly responsible for Western Germany's bold experiment in free enterprise is no American capitalist, but plump, voluble little Ludwig Erhard, chief of Western Germany's economic administration. As an economics professor he spent 20 years preaching the gospel of free enterprise. Last spring, he got his historic chance to put his faith into practice. He did it with so much gusto that even some American free enterprisers thought he was trying to do too much, too fast.

Erhard, who indefatigably travels up & down Western Germany explaining and defending his program, thinks that whatever troubles lie ahead can be straightened out by hard work under the incentive of freedom. So far, events have borne out his optimism. In Western Germany, the Communist position is weaker than ever as a consequence of the airlift and Erhard's reforms. In the North Rhine-Westphalia area, Germans last week went to the polls in a local election. The result was a resounding defeat of the Communists (their vote fell from 14% to 8%).

One trade-union leader summed up, in one sentence, the meaning of what has happened in Western Germany. "At last," he said, "we are human beings again."

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