WINNERS AND^471
Western powers needed and wanted Germany. So, unlike the hard, if
often futile, enforcement of reparations after World War I, this time the
victors offered substantial aid to their defeated enemies. The prospect
of Soviet aggression defined everything.
But one should credit above all the energy and work habits of the de
feated Germans. In 1945 their currency was worthless. The only
money that mattered was dollars or cigarettes, and American GFs,
smokers or not, were entitied to a carton a week.* (I myself bought a
Harley motorcycle, minus generator, for five cartons—strictiy against
the rules.) The years that followed were marked by hard winters, food
and fuel shortages, endless cleanup of rubble, and political repair, if not
retribution. And then in 1948 the new Germany issued a new currency,
exchanging 1 deutsche Mark for 10 Reichsmark. Price controls came
off, and hoarded stocks came out of hiding. The economy took off.^1
In twenty years, the deutsche Mark, along with the Swiss franc, became
the strongest currency in Europe. New plants sprang up and German
goods sold everywhere, enjoying a nonpareil reputation for solidity
and design.
As spectacular as was the German "economic miracle," the Japanese
one was even more so. Destruction and casualties from American
bombing were horrific, in large part owing to flammable housing and
the tenacious refusal of a proud country, never defeated in war, to ac
knowledge its situation. Toward the end, the Americans "owned" the
skies and could attack at will. Even so, it took the atom bomb to per
suade the emperor and many (but even then not all) of his advisers and
military to surrender.^2
The Japanese, like the Germans, built their recovery on work, edu
cation, determination. They too were helped by American financial as
sistance; here, as in Europe, the aim was to parry the perceived Russian
threat. The rapidity of Japanese development was the more astonish
ing in that it took place without the advantages of empire. Prewar
Japan had been convinced that control of raw materials was a sine qua
non of power and wealth, indeed had gone to war to secure this con
trol. Now they had lost everything and found to their surprise what the
economists could have told them all along, namely, that raw materials
can be delivered on competitive terms anywhere in the world. All it
takes is money to buy them. If the Western powers were so difficult be
fore the war, it was because Japan's militaristic policy invited precau-
- Other currency commodities were coffee and silk or nylon stockings, but these
were clearly less convenient. Cf. Kindleberger, Financial History, p. 403.