The spectacular economic recovery of Germany is all the more spectacular in contrast with the miserable condition of her truncated eastern part. The German experience is important to the whole world precisely because it shows at once the depths to which a people can sink under a deadly combination of collectivism and “repressed” inflation, and the heights to which it can rise under the reverse economic policy—a policy which puts an end to “repressed” inflation, replaces the “planned” with the market economy, and restores a stable currency. For this last is, in a nutshell, what the famous German reform of 1948 undertook and accomplished.
But it would be wrong to assume that it was simple. It was no mere matter of abolishing controls and reforming the monetary system. On the contrary, the rise of the German economy since 1948 has been due to a number of circumstances among which, paradoxically enough, the continuous influx of refugees from the east has proved especially beneficial
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