There were two parallel running efforts implemented in Germany and Japan after the end of the World War II: The first was restoration and the second was conversion of economy aimed to eliminate the threat of new conflicts in the future. Germany found itself amid crisis: Many of its cities and factories were ruined and much of the able-bodied male population was killed. Germany was to pay many billions in reparations and the Nazi ideology, which used to be the country's national ideology, had collapsed. The winning statepowers were facing a difficult task: To establish a new democratic system, to create a demilitarized economy, to change the system of government, public mentality and their behavior patterns. First of all it was required to transit from the centralized and rigidly controlled system of social order to free competition and promotion of private entrepreneurship.
Decisive role in the success of the German reforms was played by financial assistance provided under the Marshall Plan combined with the industriousness of German burghers and their desire for well-being and comforts. Under the supervision of the Allied Powers and under the influence of the defeat shock, a repentance of almost a whole nation took place – something without a precedent in history. Structures of civil society and political parties were restored. At the initiative of the Germany's then-minister of economy, Ludwig Erhard, a monetary reform was implemented, the main emphasis being made on consumer goods production, monetary stability, free prices and elimination of the government-regulated distribution system. Huge corporations were divided up which facilitated workers' involvement in the management. And a sweeping conversion of the military industry was accomplished. In a brief period of several years, the reforms brought abundance and plenty to the consumer market. As a result, within just one generation's lifetime Germany managed to return to the world economic elite club.
"Having Lost the War, the Germans Won the Peace." The use of cutting edge technologies, the exceptional quality and low production costs made German goods among the best competitive in the world. In 1962, summing up the results of his work, then-German chancellor Konrad Adenauer announced that the country had been fully restored. He stressed that millions of dwellings were built and highlighted other economic and political achievements. Having been through the Nazi rule, military defeat and occupation, the country became independent again and among the Europe's leading countries.
Just like they did in West Germany, in Japan too the United States went on stimulating radical democratic reforms and promoting Western economic model. Again, the military defeat and the collapse of the ambitious aggressive plans facilitated transformation in the public consciousness making the Japanese susceptible to reforms. Without any resistance the Japanese accepted democratic reforms which were imposed on them by the occupiers.
Adding to the shock of the first in their history total military defeat and occupation of the country was the shock of unlimited political freedom and then the shock of communicating with their yesterday's enemies who turned out to be not so bloodthirsty and bestial as the military propaganda had portrayed them. All political parties, trade unions and popular associations were legalized, except for the nationalistic ones; the latter were disbanded and their leaders and activists were arrested. The reforms mostly focused on demilitarization and democratization. The Japanese army was fully disbanded, its officers were put to trial and lustration. Basic freedoms, such as freedom of speech, press and association, were established among the principal values of the new "free state." An agrarian reform was implemented to eliminate (or at least to considerably alleviate) existing imbalances in land ownership and land use. The government bought up property from large landowners and resold it to their lessees at affordable prices. The final steps included the development and adoption of a new constitution: It was written by Americans, but was fundamentally different from both the former Japanese constitution and the American constitution. Temporary limits were imposed on citizen spending for personal consumption, while capital investment inside the country was encouraged. Japanese bought few foreign stuff.
Now Japan is among the world leaders in electronics, carmaking, steel industry and a number of other industries. Japanese goods are worldwide competitive; in the United States they even oust domestically made stuff out of the market. Step-by-step Japan outpaced Italy, Great Britain, France and Germany, and by 1970 became No 2 in the capitalist world, second only to the United States, in terms of GDP. At that time the year average per capita income in Japan was among the highest in the world – over $30,000.
It must be noted that economic breakthroughs and corresponding changes in the way of life and public consciousness took place in the late 1960s – early 1970s in several Asian countries which managed to accelerate development and made their way from backward to prosperous. Thus, Taiwan, Hong-Kong, Singapore and South Korea transformed into classical post-industrial states with a high level of technology. Unlike in Germany and Japan, where reforms were originally implemented under a foreign autocratic rule, the success of reforms in Taiwan, Hong-Kong, Singapore and South Korea came out as a result of the mobilized state of people's consciousness plus a wise strategy, talented leadership and some foreign assistance.
