Economic history of Germany

Germany before 1800 was heavily rural, with some urban trade centers. In the 19th century it began a stage of rapid economic growth and modernization, led by heavy industry. By 1900 it had the largest economy in Europe, a factor that played a major role in its entry into World War I and World War II. Devastated by World War II, West Germany became an "economic miracle" in the 1950s and 1960s with the help of the Marshall Plan. Currently it is the largest individual economy in the EU with GDP of roughly 3 trillion USD.

Medieval Germany, lying on the open Northern European Plain, was divided into hundreds of contending kingdoms, principalities, dukedoms/duchyes, bishoprics/dioceses, and free cities. Economic prosperity did not mean geographical expansion; it required collaboration with some, competition with others, and an intimate understanding among government, commerce, and production. A desire to save was also born in the German experience of political, military, and economic uncertainty.

The German lands had a population of about 5 or 6 million. The great majority were farmers, typically in a state of serfdom under the control of nobles and monasteries. A few towns were starting to emerge. From 1100, new towns were founded around imperial strongholds, castles, bishops' palaces and monasteries. The towns began to establish municipal rights and liberties (see German town law). Several cities such as Cologne became Imperial Free Cities, which did not depend on princes or bishops, but were immediately subject to the Emperor. The towns were ruled by patricians (merchants carrying on long-distance trade). The craftsmen formed guilds, governed by strict rules, which sought to obtain control of the towns; a few were open to women. Society was divided into sharply demarcated classes: the clergy, physicians, merchants, various guilds of artisans; full citizenship was not available to paupers. Political tensions arose from issues of taxation, public spending, regulation of business, and market supervision, as well as the limits of corporate autonomy.Cologne's central location on the Rhine river placed it at the intersection of the major trade routes between east and west and was the basis of Cologne's growth. The economic structures of medieval and early modern Cologne were characterized by the city's status as a major harbor and transport hub upon the Rhine. It was governed by its burghers.

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