Abstract

The fast recovery of Germany's economy after World War II—the so‐called “German miracle”—can be explained by the market‐oriented economic policies pursued in the 1950s, based upon the ideas of Ordoliberalism. The slounng growth rates and increasing economic difficulties since the 1970s seem to have resulted from the extension of interventionist and redistributionist policies beyond those sanctioned by Ordoliberalism. The roots of the German economic decline are political: already in the 1950s, a broad consensus existed about the need to integrate market‐oriented economic policy with a highly redistributory welfare state in a “social market economy.”