LSE research has reappraised the history of Germany’s Federal Ministry for Economic Affairs and Climate Action, contributing to commemoration and reconciliatory dialogue. 

What was the context? 

Since the First World War, Germany has gone through several drastic swings in its economic policy model: from the welfare state of the Weimar Republic to preparation for total war under Nazism, followed by two vastly different models of postwar economic reconstruction – Soviet-style central planning in East Germany and a market-based system moderated by social policy in the West, dubbed the Social Market Economy.  

A main driver of multiple economic reforms has been Germany’s large Economics Ministry (now the Federal Ministry for Economic Affairs and Climate Action). Like many German government institutions, the ministry has struggled to confront its past as a facilitator of the genocidal Nazi machinery, instead deemphasising institutional continuities from the interwar period and the Nazi economy. A founding myth developed, which understood postwar West Germany’s economic model as rooted in the pro-market doctrines of economist Walter Eucken and the Freiburg School of ordoliberalism. According to this narrative, economic policy in West Germany since the Second World War was a clean break with an interventionist past.  

What did we do? 

In 2011, Professor Albrecht Ritschl was asked to assemble an independent taskforce of historians to research the history of the ministry. The aim was to investigate the issue of institutional and policy continuity, challenging the prevailing foundational myth. The result was a four-volume report with chapters authored by 25 leading scholars. Ritschl was a co-editor of the book and authored three of its chapters.  

The research described how the ministry developed its pro-market-cum-welfare-state approach in the 1920s under the direction of Eduard Hamm, a secretary whose long-term impact had been underestimated, and who was murdered by the Nazis in 1944. A project to dismantle Germany’s many business cartels was initiated but fell prey to Nazi war preparation.  

During the early Nazi years, the ministry spearheaded major reforms of business regulation. With minor modifications, these regulations became part of the West German Competition Act of 1957 and were only dismantled in the 1980s. Ministerial bureaucracy willingly Nazified itself in 1933 but warded off Nazi party ideologues until 1936. 

In 1936, the ministry came under the influence of Goering’s “Four Year Plan”. Its role as a driver of economic war preparation was bigger than previously thought. It led the plundering of Western and Southern Europe, and the ministry was an active facilitator in the dispossession of Jews in Germany and later in occupied Western Europe.  

Research on the ministry in postwar West Germany identified how it came close to a full restoration of its interwar economic system in the mid-1950s. Ludwig Erhard, Economics Minister from 1957 to 1963, was initially seen as weak and his pro-market policy considered a failure. The major departure from the interwar system came through Constitutional Court rulings that limited the scope of government market intervention. The ministry’s role in driving this pro-market turn was therefore smaller than previously thought.    

Finally, the research detailed how little continuity existed between Nazi and communist economic planning in East Germany.  

What happened? 

In his capacity as member of the ministry’s academic advisory board, Professor Ritschl had been asked in 2009 to comment on a book proposal to commemorate the ministry’s reestablishment in 1949. He advised against limiting the scope either to West Germany or to the Nazi years for lack of historical contextualisation, instead encouraging the ministry to confront its full past since its foundation in 1919, to include East Germany under communism after 1945. This led to the establishment of the project in this form in 2011.  

The research was intended for both external and internal audiences, to enhance understanding and stimulate debate among the ministerial staff (c. 2,000 employees). To do so was a sensitive task given the ministry’s limited acknowledgment of its role in Nazi crimes. Accordingly, a series of workshops with ministerial staff, external academics, and members of the public were held to provide a forum for discussion.  

Presentation of the research by Ritschl and others enhanced understanding of the ministry’s difficult history among its staff, and also contributed to institutional processes of commemoration and reconciliation. Presentations covered the ministry’s complicity with the Nazis and provided details of staff members killed in the 1930s. The ministry decided to name its library after Eduard Hamm, the influential former secretary and the most prominent staff member murdered for his allegiance to the resistance movement.  

Subsequent discussion uncovered contrasting views between former East and West German members staff, with some former East Germans voicing concerns about whether their previous work would be researched accurately and fairly. At their suggestion, a follow-up meeting was arranged between the project members, staff, and former staff members who had played leading roles in East Germany’s economic planning apparatus. The meeting was welcomed on all sides as a very meaningful step towards reconciliation. 

In response to the demands for transparency, and to show the ministry’s determination to publicly confront its history, events throughout 2014 were directed more towards public audiences and featured notable contributions from government ministers. At a public conference on the Nazi ministry, the Nazification of the ministry in 1933 and the role of the ministry’s own Judenreferat (office for Jewish affairs) in the dispossession of Europe’s Jews were discussed. A second conference on East Germany took place, while a third discussed the postwar West German ministry, including the role of former Nazis.  

In December 2016, the book was officially launched at an event at the ministry. This was widely covered in the German press, with Der Tagesspiegel comparing the project favourably with the histories of many other ministries, which had ignored the period of the Weimar Republic and East Germany.   

In 2019, the ministry hosted a public event, not to mark the 70th anniversary of the West German ministry, as was originally planned, but to commemorate the 100th anniversary of its establishment in the Weimar Republic. In his speech, the new secretary, Peter Altmaier, emphasised the importance of the ministry recognising its full history, including its active participation in the Nazi policies of persecution, plundering, and genocide.  

The ministry has created a suite of new resources informed by this project, including internal training programmes and workshops. The aim is to raise staff awareness of the consequences of economic policy by enhancing understanding of how the ministry’s objectives interacted with the economic structure of the German state. The ministry has also developed a dedicated historical website combining archival materials (images, audio, video), statistics, and a concise, accessible economic history.   

Overall, the research has brought about a changed understanding of the Federal Ministry for Economic Affairs and Climate Action, both among its own staff, the public and at institution-level.