When World War II ended in 1945, the damage to German cities and industry had been so severe that most observers, whether Allies or Germans, realized that the country's economy was on the verge of collapse. Nonetheless, already in the 1950s commentators had begun to notice the West German Wirtschaftswunder, its “economic miracle,” which led to rapid growth into the 1960s; the West German economic performance since then has evoked both admiration and envy. Macroeconomic explanations for the miracle abound, as well as for the continuing West German ability to compete in world markets. Yet decisions at lower levels – by politicians, bureaucrats, businessmen, consumers, and others – clearly had significant impacts on that macroeconomic performance, and we still know very little about the processes of economic and technological change that occurred at the level of the various industries, with the possible exceptions of coal and steel.

The West German chemical industry deserves attention in this regard. Like other industries, it was severely affected by the war, but rebounded quickly from those effects. It performed especially well in export markets, which were essential bases for the economic miracle. Unlike the heavy industries, the chemical industry was research-intensive, like many others that helped account for the impressive West German economic performance in the postwar period.

Why was the West German chemical industry able to recover from the effects of the war and perform so well in world markets in the postwar period?