The Tank Museum
Published Aug 9, 2024The US built M47 probably isn’t the most interesting tank in history – but it was a vital part of NATO’s Cold War tank force.
Rushed into production at the outbreak of the Korean War, it never saw active service with the US military and was quickly superseded by the M48.
But large numbers were supplied to US Allies around the world – with Germany, Belgium, Italy, Portugal, Jordan, Pakistan and Austria being among the most significant users.
Probably the most famous M47 crewman of all, Arnold Schwarzenegger, served on the tank during his National Service.
00:00 | Intro
01:05 | M46 Sees Service in Korea
02:56 | Development Problems – And a Stop Gap
10:57 | Short Lived US service
12:47 | But An Export Success
15:24 | M47 plugs the gap for the US Army – goes on to serve abroad
15:46 | The Tank Museum’s M47 Restoration Project
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December 10, 2024
M47 – The Most Boring Tank Ever? | Tank Chat #178
QotD: Nuclear deterrence and the start of the Cold War
Understanding the development of US nuclear doctrine and NATO requires understanding the western allies’ position after the end of WWII. In Britain, France and the United States, there was no political constituency, after the war was over, to remain at anything like full mobilization and so consequently the allies substantially demobilized following the war. By contrast, the USSR did not demobilize to anything like the same degree, leaving the USSR with substantial conventional military superiority in Eastern Europe (in part because, of course, Stalin and later Soviet leaders did not have to cater to public sentiment about defense spending). The USSR also ended the war having annexed several countries in whole or in part (including eastern Poland, Latvia, Lithuania, Estonia, parts of Finland and bits of Romania) and creating non-democratic puppet governments over much of the rest of Eastern Europe. American fears that the USSR planned to attempt to further extend its control were effectively confirmed in 1948 by the Russian-backed coup in Czechoslovakia creating communist one-party rule there and by the June 1948 decision by Stalin to begin the Berlin Blockade in an effort to force the allies from Berlin as a prelude to bringing all of Germany, including the allied sectors which would become West Germany (that is, the Federal Republic of Germany).
It’s important, I think, for us to be clear-eyed here about what the USSR was during the Cold War – while the USSR made opportunistic use of anti-imperialist rhetoric against western powers (which were, it must be noted, also imperial powers), the Soviet Union was also very clearly an empire. Indeed, it was an empire of a very traditional kind, in which a core demographic (ethnic Russians were substantially over-represented in central leadership) led by an imperial elite (Communist party members) extracted resources, labor and manpower from a politically subordinated periphery (both the other Soviet Socialist Republics that composed the USSR and the Warsaw Pact countries) for the benefit of the imperial elite and the core. While the USSR presented itself as notionally federal in nature, it was in fact extremely centralized and dominated by a relatively small elite.
So when Western planners planned based on fears that the highly militarized expansionist territorial empire openly committed to an expansionist ideology and actively trying to lever out opposing governments from central (not eastern) Europe might try to expand further, they weren’t simply imagining things. This is not to say everything they did in response was wise, moral or legal; much of it wasn’t. There is a certain sort of childish error which assumes that because the “West” did some unsavory things during the Cold War, that means that the threat of the Soviet Union wasn’t real; we must put away such childish things. The fear had a very real basis.
Direct military action against the USSR with conventional forces was both politically unacceptable even before the USSR tested its first nuclear weapons – voters in Britain, France or the United States did not want another world war; two was quite enough – and also militarily impossible as Soviet forces in Europe substantially outnumbered their Western opponents. Soviet leaders, by contrast, were not nearly so constrained by public opinion (as shown by their strategic decision to limit demobilization, something the democracies simply couldn’t do).
This context – a west (soon to be NATO) that is working from the assumption that the USSR is expansionist (which it was) and that western forces would be weaker than Soviet forces in conventional warfare (which they were) – provides the foundation for how deterrence theory would develop.
Bret Devereaux, “Collections: Nuclear Deterrence 101”, A Collection of Unmitigated Pedantry, 2022-03-11.
October 13, 2024
Occupation of Germany, Plunder and Enslavement?
World War Two
Published 12 Oct 2024The Allies’ occupation of Germany was marked by competing visions for its future, ranging from France’s focus on security to the Soviet push for reparations. This episode dives into the complex negotiations that determined Germany’s borders, industrial disarmament, and economic management, all of which would shape Europe’s post-war order and fuel the East-West divide.
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July 21, 2024
“Since 2012, NATO has experienced a revival and a return to relevance that would make any washed up 80’s movie star turn green with envy”
Big Serge considers where NATO came from, where it is now, and where it might be going:
NATO, in its original conception, was designed to resolve a very particular security dilemma in Western Europe. In the immediate wake of World War Two, Western Europe — specifically Britain and France — had to consider how it might be possible to mount a defense against the colossal Soviet forces that were now conveniently forward deployed in Central Germany. The 1948 “Western Union Defense Organization” (WUDO), which included the aforementioned Anglo-French allies along with the Netherlands and Belgium, was created with an eye to this problem. With the rapid demobilization of American armies in Europe, however, it was obvious that this threadbare European alliance had dismal prospects in the unthinkable event of war with the Soviet Union. Field Marshal Bernard Montgomery, the supreme commander of WUDO forces, was asked what the Soviets would it would take for the Red Army to attack and push through all the way to the Atlantic, and famously replied: “Shoes”.
NATO, therefore, was an attempt to resolve the total strategic overmatch on the European continent through two expedients. The first of these, obviously was America’s membership, which brought both formal American security commitments as well as permanent American military deployments in Europe. The second strategic boost provided by NATO concerned Germany. Even after being ravaged by war and dismembered by the allied occupation, Western Germany remained the most populous and potentially powerful state in Western Europe. From the beginning, it was clear (particularly to the Americans and the British) that any sustainable strategy for deterring or fighting the Red Army would have to make use of German manpower — but this implied, axiomatically, that West Germany would have to be economically rehabilitated and rearmed. The prospect of *intentionally* rearming Germany was immensely upsetting to the French, for obvious reasons given the events of 1940-44. [NR: And 1914-18, and especially, 1870-71.]
The first NATO summit conference
NATO thus solved two major obstacles to a sustainable and viable defense of Western Europe, in that it formally and permanently tied the United States into the European defense architecture, and it provided a mechanism to rearm West Germany without allowing for the possibility of a truly autonomous and revanchist German foreign policy.
In many ways, NATO can be seen as a total reversal of the Versailles system which had doomed Europe after the First World War by guaranteeing the Second. The interwar period saw the Anglo-French alliance pitted against an adversarial Germany without American assistance; NATO ensured American commitment to European defense and rehabilitated Germany into a valuable partner — providing the command architecture to rearm Germany and mobilize German resources without allowing Germany to conduct an independent foreign policy.
Thus, the popular formulation, coined by the first General Secretary of NATO, Lord Hastings Ismay, that NATO existed to “keep the Americans in, the Russians out, and the Germans down”. This statement, however, has frequently been misinterpreted. The idea of “keeping the Americans in” was not a plot by Washington to dominate the continent, but a contrivance by the Europeans to keep America engaged in their defense. As for “keeping the Germans down”, this is pithily stated but not entirely accurate — the entire point of adding West Germany to NATO was to allow it to rebuild and rearm in the interests of collective western defense. For the United States, NATO made sense as a way to mobilize European resources and calcify the “front” in Europe, in the context of a broader geopolitical struggle with the USSR.
This is what NATO was for. It was a mechanism for formalizing an American security commitment in Europe and mobilizing German resources to deter the USSR, and it worked — the frontline of the Cold War in Europe remained static up until the collapse of the Soviet Union due to the naïve and self-destructive political visions of one Mikhail Gorbachev.
But what is NATO for now? What purpose does it serve in the context of a broader American grand strategy? More to the point, does such a grand strategy exist, and is it coherent? These are questions worth asking.
June 13, 2024
Debunking the “miraculous” Marshall Plan
If you’ve read anything about the state of Europe in the aftermath of the Second World War, you’ll undoubtedly have heard of the way the Marshall Plan did wonders to get (western) Germany and the other battle-devastated nations back on their feet economically. At FEE, Christian Monson suggest that you’ve been provided with a very rosy scenario that doesn’t actually accord with the facts:
Konrad Adenauer in conversation with Ludwig Erhard.
KAS-ACDP/Peter Bouserath, CC-BY-SA 3.0 DE via Wikimedia Commons.
Unfortunately, the ubiquity of the myth that the Marshall Plan rebuilt Germany is proof that state-controlled education favors propaganda over economic literacy. Despite the fact that most modern historians don’t give the Marshall Plan much credit at all for rebuilding Germany and attribute to it less than 5 percent of Germany’s national income during its implementation, standard history textbooks still place it at the forefront of the discussion about post-war reconstruction.
Consider this section from McDougal Littell’s World History (p. 968), the textbook I was given in high school:
This assistance program, called the Marshall Plan, would provide food, machinery, and other materials to rebuild Western Europe. As Congress debated the $12.5 billion program in 1948, the Communists seized power in Czechoslovakia. Congress immediately voted approval. The plan was a spectacular success.
Of course, the textbook makes no mention of the actual cause of the Wirtschaftwunder: sound economic policy. That’s because, for the state, the Marshall Plan makes great statist mythology.
Not only is it frequently brought up to justify the United States getting involved in foreign conflicts, but it simply gives support for central planning. Just look at the economic miracle the government was able to create with easy credit, they say.
And of course, admitting that the billions of dollars pumped into Germany after WWII accomplished next to nothing, especially when compared to something as simple as sound money, would be tantamount to admitting that the government spends most of its time making itself needed when it isn’t and thereby doing little besides getting in the way.
The Inconvenient Truth of Currency Reform
You are unlikely to find the real cause of the Wirtschaftwunder mentioned in any high school history textbook, but here is what it was. In 1948, the economist and future Chancellor of West Germany Ludwig Erhard was chosen by the occupational Bizonal Economic Council as their Director of Economics. He went on to liberalize the West German economy with a number of good policies, the most important being currency reform.
The currency in Germany immediately after WWII was still the Reichsmark, and both the Nazis and then the occupying Soviet authorities had increased the amount in circulation significantly. As a result, by 1948 the Reichsmark was so worthless that people had turned to using cigarettes and coffee as money.
To give people a true store of value so that they could calculate economic costs accurately, assess risk and invest in the future, Erhard created the Deutsche Mark, West Germany’s new currency. Like ripping off a bandaid, he decreased the money supply by 93 percent overnight.
It’s also worth noting that while Erhard, following his school of Ordoliberalism, did form a central bank, it was at least designed independent from the government and followed a hard-money policy (preserving a stable amount of money) through the length of the Wirtschaftswunder. In fact, the original Bank Deutsche Länder was rather limited in scope until it was reorganized as the considerably more centralized Bundesbank in 1957, incidentally when Germany’s economic miracle began to lose steam.
Other notable liberal policies instituted by Erhard included removing all price controls and lowering taxes from the Nazis’ absurd 85 percent to 18 percent. The American occupational authorities opposed these reforms, but Erhard went through with them anyway. This liberalization had an immediate effect. The black market disappeared almost overnight, and in one year, industrial output almost doubled.
Perhaps most poignantly, unemployment dropped from more than 10 percent to around 1 percent by the end of the 1950s. Normally the government tries to justify currency manipulation as a means to eliminate unemployment, but the Wirtschaftwunder is evidence that sound money does the job far better.
October 7, 2023
Rearming West Germany: The G1 FAL
Forgotten Weapons
Published 19 Jun 2023Today we are taking a look at a German G1 pattern FAL. The initial purchased of the G1 were actual made by the German Border Guard (the Bundesgrenschutz). In the aftermath of World War Two, the western Allies decided to perpetually disarm Germany, and German security was provided by French, British, and American forces. As the Iron Curtain fell across Europe, that attitude softened — West Germany was on the front lines of the Cold War, and could be a valuable ally against Communism in the East. Thus in 1951, the West German Bundesgrenzschutz (Border Guards) were formed and armed — basically with all WW2 Wehrmacht equipment. Looking to improve its small arms in 1955/56, the BGS tested a number of modern rifles and decided to adopt the FAL.
The BGS initially ordered 2,000 FAL rifles from FN, with wooden hand guards and a fixed flash hider (essentially a standard Belgian FAL) — these are known as the “A” pattern. A second BGS order for 4,800 more rifles followed, this time of the “B” pattern with a metal handguard and folding bipod. This was the first use of an integral bipod on the FAL, and would go on to be a popular option for other buyers.
In 1955, the German Army was reinstated as the Bundeswehr. Looking over the BGS rifle testing, the Bundeswehr also decided to adopt the FAL, and placed and order for 100,000 rifles — the “C” pattern. These include sights lowered 3mm by specific German request, as well as a set of swappable muzzle devices (flash hider and blank-firing adapter).
Ultimately, FN was unwilling to license FAL production to West Germany, and this drove the Germans to adopt the Spanish CETME as the G3 rifle, which it was able to license. The Bundeswehr G1 rifles were eventually transferred to the BGS and later sold to other allies as surplus.
Special thanks to Bear Arms in Scottsdale, AZ for providing access to this rifle for video!
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September 16, 2023
The many, MANY failed VW Beetle Reboots!
Big Car
Published 22 Oct 2021I recently made a video on the many, many times British Leyland tried to update the Mini. The lack of an update helped to make the original Mini an iconic shape. The same has happened to many other iconic cars, and the Volkswagen Type 1 or Beetle falls into the same camp. Why did it take 36 years until the Beetle would get a replacement, and how did a car made as a Nazi show of strength end up in a Disney film?
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July 14, 2023
MG-3: Germany Modernizes the Classic MG-42
Forgotten Weapons
Published 7 Apr 2023When the Bundeswehr was formed, it chose to simply continue using the MG42 as its standard GPMG. This was initially done by converting older MG42s to 7.62x51mm NATO as the MG1 (adopted in 1958), but progressed to production of a brand new version of the gun by Rheinmetall (adopted in 1968). The MG3 included improvements to the belt feed system, added integral antiaircraft sights, and allowed a rate of fire between 700 and 1300 rpm depending on the choice in bolt, buffer and booster. It was the standard German MG until finally being replaced by the MG5 in 2012 — and it is/was in use by nearly 4 dozen other countries as well. Today we are going to compare this transferrable, C&R MG3 to an original MG42 to see the improvements that were made.
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December 15, 2022
Kraut Space Magic: the H&K G11
Forgotten Weapons
Published 25 Dec 2018I have been waiting for a long time to have a chance to make this video — the Heckler & Koch G11! Specifically, a G11K2, the final version approved for use by the West German Bundeswehr, before being cancelled for political and economic reasons.
The G11 was a combined effort by H&K and Dynamit Nobel to produce a new rifle for the German military with truly new technology. The core of the system was the use of a caseless cartridge developed in the late 60s and early 70s by Dynamit Nobel, which then allowed H&K to design a magnificently complex action which could fire three rounds in a hyper-fast (~2000 rpm) burst and have all three bullets leave the barrel before the weapon moved in recoil.
Remarkably, the idea went through enough development to pass German trials and actually be accepted for service in the late 1980s (after a funding shutdown when it proved incapable of winning NATO cartridge selection trials a decade earlier). However, the reunification with East Germany presented a reduced strategic threat, a new surplus of East German combat rifles (AK74s), and a huge new economic burden to the combined nations and this led to the cancellation of the program. The US Advanced Combat Rifle program gave the G11 one last grasp at a future, but it was not deemed a sufficient improvement in practical use over the M16 platform to justify a replacement of all US weapons in service.
The G11 lives on, however, as an icon of German engineering prowess often referred to as “Kraut Space Magic” (in an entirely complimentary take on the old pejorative). That it could be so complex and yet still run reliably in legitimate military trials is a tremendous feat by H&K’s design engineers, and yet one must consider that the Bundeswehr may just have dodged a bullet when it ended up not actually adopting the rifle.
Many thanks to H&K USA for giving me access to the G11 rifles in their Grey Room for this video!
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September 1, 2022
Rheinmetall MG42/59: The Slow-Fire Commercial MG42
Forgotten Weapons
Published 4 May 2022After World War Two, when West Germany was allowed to reconstitute its army and join NATO, it needed small arms. The new Bundeswehr chose the MG42 as its standard GPMG, and the Rheinmetall firm undertook the project of recreating the technical data package to build them. The work was completed in 1958, and the company began making new MG42s in 7.62 NATO for the commercial export market as well as for the Bundeswehr (which designated the gun the MG1). Rheinmetall made a number of iterative improvements to the design, including nearly doubling the bolt weight (from 550g/1.2lb to 950g/2.1lb) for their MG42/59 model to bring the rate of fire down to a reasonable 700-900 rpm. The bolt (and its associated heavy buffer) was not adopted by the Bundeswehr, but was bought by other clients.
The MG42/59 also includes many of the other upgrades that would be implemented on the final MG3 version adopted by the military. These include:
– Top cover hinge that holds the cover in a raised position
– Feed tray to mount modern belt boxes and prevent belts from falling out when opened
– Integrated AA rear sight
– New muzzle booster designThis particular one is a beautiful example made in 1964 and brought to the US early enough to be a registered, transferrable, C&R piece.
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August 13, 2022
QotD: Erich von Manstein
In the Britain of the Sixties, a certain mystique still attached to the generals of the Third Reich. In their stylish uniforms and their gleaming jackboots, they had swaggered. Only two, Keitel and Jodl, were executed at Nuremberg; the rest got away with murder.
Even some of those who were convicted of war crimes had friends in high places. One of the most prominent was Erich von Manstein, the architect of many German victories both in the Battle of France and on the Eastern front. He was also complicit in the genocide of more than a million Jews and others by the Nazi Einsatzgruppen in Ukraine.
Yet Churchill was among those who successfully campaigned to have Manstein’s 18-year sentence reduced to 12, of which he served only four.
Manstein’s memoir Verlorene Siege (translated as Lost Victories) appeared in 1958, a key text in the mythology that depicted the Wehrmacht as “clean” and laid the blame for war crimes on Hitler. Konrad Adenauer, the first chancellor of the postwar Federal Republic, also played his part in the rehabilitation of Manstein, on the grounds that West German rearmament required a sharp distinction between the Nazis and an untainted military tradition as the basis for the new Bundeswehr.
Daniel Johnson, “The moral blindness of Putin’s generals”, The Critic, 2022-05-10.
July 24, 2022
QotD: British armour from BAOR to the first Gulf War
To that end generations of British soldiers were stationed there training for a war that they hoped would never come. To this day there are still serving Cold War veterans who even into the late 1980s knew where they would deploy to, and the likely exact spot in the field or woods where they would dig their trenches and realistically be killed.
This force though was essentially a static one, designed to operate defensively and underpinned by an enormous static logistical and support network stretching from the Inner German Border all the way back to Antwerp and then the UK. The British Army was able to sustain armour in large numbers in part because it had the threat to face, the space to operate and the support network in place to enable this to occur. To this day the subject of how well supported BAOR was through the extensive rear communications zone efforts, and the widespread workshops (such as in Belgium) designed to repair and support UK units is not widely known or told, but deserves much greater recognition.
This matters because when people look back to the size of the British Army in 1990 and look at how many tanks we had then compared to now, they forget that the Army’s MBT capability was essentially a static garrison force waiting to conduct a defensive campaign against a peer threat where it expected to take heavy losses and probably operate very quickly in an NBC environment. It was not intended to be a deployable force capable of operating across the planet on an enduring basis.
This is why when people talk about how many tanks were deployed in 1991 to the Gulf War (some 220 Challenger 1’s were deployed) they forget that this was the first time since Suez that the UK had operated heavy armour overseas. It took many months to get this force into place, and it came at the cost of gutting the operational capability of the remaining BAOR units, who found their logistical support chains hammered in order to support the forces assigned to GRANBY.
The harsh, and perhaps slightly uncomfortable reality for the UK is that OP GRANBY required nearly 6 months of build up at the cost of gutting wider armoured warfare capability – proving that away from home, having 900 tanks is irrelevant if you are operating outside normal parameters and are having to effectively cannibalise or mothball most of them to keep 220 in the Gulf.
By contrast OP TELIC saw over 100 tanks deployed, but a significantly shorter lead in time for the deployment – testament to the significant investments made in the intervening period in logistical capabilities.
Sir Humphrey, “Tanks for nothing — Why it does not matter if the British Army has fewer tanks than Cambodia”, Thin Pinstriped Line, 2019-04-24.
June 13, 2022
Lightning fast interceptor turned nuclear strike bomber: the Canadair CF-104 Starfighter
Polyus Studios
Published 29 Sep 2020Don’t forget to like the video and subscribe to my channel!
Support me on Patreon – https://www.patreon.com/polyusstudiosThis is an UPDATED version of the video. It includes many changes and corrections to the original video. Many thanks to Gary Watson for all his contributions!
Starting in 1959 Canadair began building Canada’s fastest jet at their plant in Montreal. It was designed as a sleek high altitude and high speed interceptor, but was adapted for low level ground strike missions with conventional and nuclear weapons. It was the Canadair CF-104 Starfighter, Canada’s missile with a man in it.
0:00 Introduction
0:33 Historical Context
2:01 Design Choice
4:15 Canadair’s Production Run
6:50 Configuration and Specifications
11:04 Nuclear Strike Role
12:13 Operational History
16:06 Conventional Role
17:53 Retirement and Replacement
19:28 Accidents, Controversy and Legacy
22:56 ConclusionMusic:
“Denmark” – Portland Cello ProjectResearch Sources:
Canadair CF-104 Starfighter by Harold A. Skaarup (http://silverhawkauthor.com/canadian-…)
Canadair CF-104 Starfighter by Canadian Starfighter Association (http://canadianstarfighterassociation…)
CF-104 Flight Operations by Air Force Museum of Alberta (https://www.rcaf.museum/history/rcaf-…)
Story of the F-104 Starfighter in Norwegian Service by Bjorn Hafsten (http://starfighter.no/hist-en3.html)
Starfighters with Turkey by Joe Baugher (http://www.joebaugher.com/usaf_fighte…)
ASN Aviation Safety Database by Aviation Safety Network (http://aviation-safety.net/wikibase/d…)
Starfighter by David L. Bashow (Fortress Publication, 1990, ISBN: 0-919195-12-1)
Photography credit 6mins10sec: Gary WatsonFootage Sources:
Personal Footage – Gary Watson
Cold War Fighter Pilot – Ken Castle, CD, Flight-Lieutenant (ret’d) – Canada Aviation and Space Museum (https://youtu.be/sEUOFyPLL94)
CF 104 Baden Soellingen 1965 – Gordon Price (https://youtu.be/4UZ9PE58Eq0)
CF104 Germany 1983/4 441 Squadron CAF – Tom Hammond (https://youtu.be/xrqjAKHflCo)
Great Planes Lockheed F-104 Starfighter – Discovery Channel (1996)
Avro Canada CF 100 Canuck – Avro (1956)#Starfighter #CanadianAerospace #PolyusStudios
May 20, 2022
The Cold War Legend That Delivered SAUSAGES To Tanks | Forces TV
Forces News
Published 26 Apr 2018To British troops based in north Germany in the last two decades of the Cold War, he was a legend. But this was no commando or member of the special forces.
Check out our website: http://forces.net
Twitter: https://twitter.com/ForcesNews
March 22, 2022
West Germany’s Wirtschaftwunder — the staggering economic postwar recovery
Christian Monson debunks the common tale taught in western schools of reason for the amazing recovery of West Germany’s economy after World War Two:
Occupation zone borders in Germany, 1947. The territories east of the Oder-Neisse line, under Polish and Soviet administration/annexation, are shown as cream as is the likewise detached Saar protectorate. Berlin is the multinational area within the Soviet zone.
Image based on map data of the IEG-Maps project (Andreas Kunz, B. Johnen, and Joachim Robert Moeschl of the University of Mainz) — www.ieg-maps.uni-mainz.de, via Wikimedia Commons.
This “economic miracle” is commonly referred to as die Wirtschaftswunder. But how did Germany go from rubble to riches in just a decade while neutral countries like Spain merely treaded economic water? If you ask your average American history student, they will say the Marshall Plan, of course!
Unfortunately, the ubiquity of the myth that the Marshall Plan rebuilt Germany is proof that state-controlled education favors propaganda over economic literacy. Despite the fact that most modern historians don’t give the Marshall Plan much credit at all for rebuilding Germany and attribute to it less than 5 percent of Germany’s national income during its implementation, standard history textbooks still place it at the forefront of the discussion about post-war reconstruction.
Consider this section from McDougal Littell’s World History (p. 968), the textbook I was given in high school:
This assistance program, called the Marshall Plan, would provide food, machinery, and other materials to rebuild Western Europe. As Congress debated the $12.5 billion program in 1948, the Communists seized power in Czechoslovakia. Congress immediately voted approval. The plan was a spectacular success.
Of course, the textbook makes no mention of the actual cause of the Wirtschaftwunder: sound economic policy. That’s because, for the state, the Marshall Plan makes great statist mythology.
Not only is it frequently brought up to justify the United States getting involved in foreign conflicts, but it simply gives support for central planning. Just look at the economic miracle the government was able to create with easy credit, they say.
And of course, admitting that the billions of dollars pumped into Germany after WWII accomplished next to nothing, especially when compared to something as simple as sound money, would be tantamount to admitting that the government spends most of its time making itself needed when it isn’t and thereby doing little besides getting in the way.
Credit for the turnaround should be accorded to Ludwig Erhard, according to Alasdair Macleod at the Cobden Centre:
Anyone who favours regulation needs to explain away Germany’s post-war success. Her economy had been destroyed, firstly by the Nazi war machine, and then by Allied bombing. We easily forget the state of ruin the country was in, with people in the towns and cities actually starving in the post-war aftermath. The joint British and American military solution was to extend and intensify war-time rationing and throw Marshall aid at the problem.
Then a man called Ludwig Erhard was appointed director of economics by the Bizonal Economic Council, in effect he became finance minister. He decided, against British and American misgivings, as well as opposition from the newly-recreated Social Democrats, to do away with price controls and rationing, which he did in 1948. These moves followed his currency reform that June, which contracted the money supply by about 90%. He also slashed income tax from 85% to 18% on annual incomes over Dm2,500 (US$595 equivalent).
Economists of the Austrian school would comprehend and recommend this strategy, but it goes wholly against the bureaucratic grain. General Lucius Clay, who was the military governor of the US Zone, and to whom Erhard reported, is said to have asked him, “Herr Erhard, my advisers tell me what you have done is a terrible mistake. What do you say to that?”
Erhard replied, “Herr General, pay no attention to them! My advisers tell me the same thing.”
About the same time, a US Colonel confronted Erhard: “How dare you relax our rationing system, when there is a widespread food shortage?”
Erhard replied, “I have not relaxed rationing, I have abolished it. Henceforth the only rationing ticket the people will need will be the deutschemarks. And they will work hard to get those deutschemarks, just wait and see.”
The US Colonel did not have to wait long. According to contemporary accounts, within days of Erhard’s currency reform, shops filled with goods as people realised the money they sold them for would retain its value. People no longer needed to forage for the basics in life, so absenteeism from work halved, and industrial output rose more than 50% in the second half of 1948 alone.
