SOME LESSONS FROM POST WAR RECOVERY IN WESTERN GERMANY
M. L. Puri (Jamalpur, February 24, 1958)
The author discusses the lesser known reasons for the ‘West German Miracle’. The Marshall Plan did help, but what really turned the tide was the people’s industriousness and work culture. We in India would do well to learn from their attention to detail and the precise codification of technical data. This ensures harmony between what it taught and what is practiced at the work level.
1.1 At the time of currency reforms in 1948 Western Germany was in a state of literal ruins. Today she stands in the forefront of European economy, providing full employment with a high standard of living, not withstanding the influx of nearly a crore of refugees from the East, representing a quarter of the indigenous population. The same picture is reflected in the growing strength of West German currency. At the end of 1948, 100 West German marks were quoted in Zurich at 22 Swiss Francs. In 1953 this ratio was 1:1. This extraordinary pace of West German Progress has become a common place legend: “THE GERMAN MIRACLE”.
1.2 Why have I chosen to talk on something that is already well known? It is because the real factors that have made the Miracle possible are not so well known; and for us, who are also aspiring to develop fast with meager resources, knowledge of these factors is of great importance. We should know what is required to support the superstructure of rapid development from a humble start, so that timely action may be taken to consolidate the right type of foundations and costly errors of oversimplification may be avoided.
1.3 I think for an objective evaluation of what I say, it would be helpful to give you the background of my associations in Western Germany. I was on deputation with the High Commission of India, London from August, 1952 to November, 1956. For the first two and a quarter years of deputation, I was attached to the Railway Inspectorate and thereafter I worked as Assistant to the Railway Advisor. Throughout my time in the Railway Inspectorate, I was stationed in Western Germany; and later on also, I visited that country quite frequently for liaison work and study.
1.4 My assignments in Germany obliged me to undertake extensive traveling and brought me in close touch with a fairly broad cross-section of the German industry and institutions. At the same time I visited several industrial fairs and exhibitions and also took the opportunity of discussion with knowledgeable friends. When I gained a working knowledge of the German language, I began to take more intimate interest in the common man and his life. With these facilities, I tried to grasp the basic features of what was unfolding, and draw such lessons as appeared pertinent for our own development; and that is what I propose to share with you this evening, in the hope that they would serve as a basis for discussion and food for further thought.
2. MOTIVE FORCES BEHIND RECOVERY:
2.1 In some quarters it is believed that West German recovery was brought about by Marshall Aid. That is not true. The Aid was certainly a prop, but it was not the prime mover. The real motive force for reconstruction was constituted by the German people themselves, gifted, industrious and disciplined, who had tasted better life and were determined to get it back. Notwithstanding the colossal devastation in the country, I seldom heard complaint or defeatism. Instead, there was businesslike acceptance of the problems that confronted and earnest intention to solve them the hard and efficient way. With no illusions about the magnitude of what was involved, everybody appeared to go about his share of work with confidence and determination and, not infrequently, made sport of the hardship.
2.2 An equally significant factor in accelerating the pace of reconstruction in West Germany was the healthy climate of work, which promoted full play of individual initiative and capacity for the common good. Enterprise was free and highly competitive, but the psychological and economic force closure was such that the individual activity harmonized with larger national interest. The individual’s personal interest was respected, but it was skillfully linked to the interests of the industry and the state. He was encouraged and enabled to earn more, so that he and his community could both benefit. He was treated as an intelligent and discriminating person and the effort was to win his loyalty and zeal with reason and fairplay. Accordingly, his position in the community, the contribution he was expected to make and the rewards attached to that contribution were presented to him clearly and held good in practice. As an impressive example of this attitude, the German Federal Government, jointly with the industry, went to the extent of organizing a most elaborate exhibition in Dusseldorf in 1953, with the sole object of educating the masses, particularly the teenagers, as to what each one may do, so that “ALL SHALL LIVE BETTER”.
2.3 No less significant was the pioneering role played by the German Management in mobilizing the national resources for reconstruction. Equipment and tools were scarce. What was available could not be directly made use of, partly due to war damage and partly because indiscriminate dismantling for reparations had removed important links from practically every production unit. Labor was available, but the position with regard to industrial skills was acute. Many key technicians had been lost in war or deported, continuity in factories was dislocated, and men in the most useful age groups had been without proper training for some eight years. In the de-nazification process even technical literature, which bore marks of the old regime, had been destroyed. This looked like a hopeless situation, but it was tackled with clear vision, resourcefulness and a penetrating grasp of fundamentals. Everywhere, in small factories and large undertakings, the same basic pattern was discernable: one man or a compact group of men formed the spearhead of construction and the group behind gave solid support, in an atmosphere of enviable partnership.
3. THE MODUS OPERANDI:
3.1 The Germans recognized that they could regain and improve upon their pre-war standard of living, only if they could reduce the burden of unemployment and step up the productivity of those in employment. They strove for the maximum possible surplus for investment, and to that end they temporarily accepted the discipline of austerity, while exerting their utmost to increase the surplus margin through meticulous attention to efficiency coupled with honest hard work. Hardly anyone expected a dole because there was nothing to go round and “self financing” was accepted as a normal feature. The hard earned surplus was then judiciously invested in the most critical factors of production, promising the highest returns. In this manner, one could visibly see reconstruction gathering mass like a snowball. Under the tempo of activity, the period of austerity too was not long and in less than five years time attention was also focused on individual needs and comforts with equal effect; and, to day, in a single decade, the country is blessed with prosperity in every sense of the word.
3.2 In the initial stages, the immediate problem facing the Germans was to mobilize the means of production and the materials – even the most primitive ones – that were left over after the war and subsequent reparations. The other problem was to recondition the vast body of men released from prisoner of war camps for productive work and provide the normal educational and training curriculum for the teenagers. Thus improvisation of means of production and industrial training received the highest priorities. At the same time, it was realized that successful improvisation and unorthodox training and instruction called for high caliber specialists. The same specialists were also required to universalize the available know-how and to develop new machines and methods to support the German industry in international competition. Accordingly emphasis was placed on prospecting and grooming the right type of talent for the specialist positions. In the interests of industrial efficiency and fairplay, training programs were integrated with day to day executive working to ensure that deserving individuals were correctly placed and suitably rewarded. The imperative necessity to survive as an industrial nation and keen competition exercised a powerful corrective influence and made people at every level willing to learn and co-operate as no one could afford loss of production.
3.3 German organization was comprehensive but precise and left everyone with a clear-cut picture of what he had to do and how. Accountability and discipline were strict and this applied to all levels. However, the strictness was not arbitrary. Yardsticks of performance were thoughtfully conceived and carefully set, and they were usually introduced with the aid of example from the top. As a general rule the “higher man” was also the better man, who actually led and controlled from a remarkable grasp of detail.
4. OUTSTANDING FEATURES OF GERMAN EFFORT:
4.1 Work study, Rationalization and Cost Control.
4.11 Germans considered it worthwhile to employ part of the available effort and resources in finding out how the bulk of the effort and resources could be employed with maximum volume effect for reconstruction. This was achieved through organized work study and Rationalization in every sphere of activity. They also recognized that ultimately the most rational yardsticks of performance were in terms of costs. Accordingly great importance was attached to the perfection and application of effective Cost Control.
4.12 Through systematic instruction, training and practical demonstration, an all out effort was made to bring home to everyone from top to bottom that work study was in essence only objective criticism, including self criticism, directed to finding the exact truth about facts; and Rationalization was an application of that truth in eliminating waste for the benefit of both the worker and the community. As a corollary, since ignorance and lack of skill caused the most serious waste or resources, their removal through every possible means was the most fruitful form of investment.
4.13 Rationalization ultimately reflects in the methods employed in the production of goods and services; and as such, every activity in the country, be it steel making or be it the sweeping of floors, seemed to be charged with a powerful drive to improve methods and find THE BETTER WAY. The better way was not necessarily the most mechanized or automated way. It could be just the reverse of it. Its real criterion was that it should give the maximum volume effect from the available resources and environment, subject to the limitations of time. Thus methods were always considered from both the short term and long term angles. On one hand there was the emphasis on broadening the area of application of the best known methods in the country. On the other hand there was the continuous effort to make the best better. That is how productive units were quickly improvised from ruins and then transformed into modern factories in a short time.
4.2 Codification and Documentation.
4.21 The process of rationalization was applied effectively in increasing the output of the available specialist capacity. Achievements were not allowed to be wasted and results of specialist activity were carefully codified for general employment. At the same time, it was realized that codification had practical implications and if the codified subject matter fell short of the best practice and tradition, or lacked completeness and precision, it could do damage in place of good. Thus standards and practice manuals were painstakingly developed and thoroughly vetted before issue. The same care and attention were also devoted to textbooks and other instructional literature.
4.22 Similarly, meticulous care was exercised to ensure that talent and effort were not wasted on duplication or in sorting out haphazardly arranged material. Accordingly the science and facilities of documentation were rapidly developed, so that those engaged in reconstruction, particularly the ones employed on research and development work, were promptly and comprehensively provided with the latest developments in their respective spheres. Thus in most cases their task was reduced to selection and integration of the perfected detail, and wherever original work was undertaken, it was with the assurance that there was no alternative to doing the same.
4.23 Since industrial specialist capacity was the real bottleneck in reconstruction, which could not be immediately created or exchanged for money, the impact of means such as codification and documentation calculated to enlarge the output of existing specialist capacity cannot be over estimated.
4.3 Technical training and instruction.
4.31 The average German holds an earnest and reverential attitude towards training and testing. This attitude is the German’s most important safeguard against dilution of professional standards. It would not be out of place to point out that, even in the present modern age, the traditions of old craft guilds, with their strict trade discipline, continue to live in Germany. For example, no one in Germany may open a shoe repair shop or a baker’s shop if he does not possesses a certificate of competency from the Chamber of Crafts. Similarly, no one may train an apprentice, unless training is entrusted to a master craftsman certified fit for the purpose by the Chamber of Crafts.
4.32 Another distinguishing feature of the German system of apprenticeship is the painstaking personal interest taken by the instructor, the teacher and the parent in the apprentice. Along with technical training, instruction in citizenship and religion is also imparted and that, in no small measure, contributes in building industrial discipline, morale and team work.
4.33 German apprenticeship and other instruction are organized on strictly utilitarian lines. The training institutions – apprenticeship shops, trade schools, engineering schools and technical universities – are closely knit with the industry, and, along with basic instruction, they cater for the specialized needs of the areas in which they are situated. Theory and practice are well synchronized and every effort is made to teach precisely what is required on the shop floor. At the same time, superfluous matter is carefully weeded out of both the practical and theoretical curricula to relieve the trainee of redundant load and avoid confusion.
4.34 The feature of personal attention is kept up in employment as well and, as stated previously, considerable pains are taken to spot and groom talent for specialist work. Systematic opportunities are provided for this purpose in the factories themselves and advantage is also taken of courses of instruction given by technical institutions and specialist organizations. Advantages of specialization are recognized for all levels and machinery exists whereby talented individuals in the lower ranks can rise to higher positions, unprejudiced by their initial start, though with comparatively greater exertion.
4.4 Industrial relations
4.41 In spite of the trying conditions of work and rigid discipline, industrial relations in Germany remained harmonious. During the crucial period of reconstruction up to 1953, there were no instances of any major stoppage of work. There have been isolated cases of strikes in 1954 and 1955, but the repercussions were not serious and settlement was reached by negotiation.
4.42 This harmony was largely due to the respect that the average German holds for what is called “correctness”. Hard work, discipline and efficiency are accepted as the natural attributes of correctness and there was no argument in these points. The main argument was on sharing the fruits of productivity but, here also, both management and labor appeared to realize their interdependence and remained reasonable. Another significant factor for smooth teamwork was the widespread institution of small factories, where the owner combined the functions of manager and specialist. He knew each one of his men, whose ties with the factory, not infrequently, extended over more than one generation, and work proceeded practically on a family basis.
4.43 Considerable care and attention was devoted in cultivating the aforesaid attitude in the young, in school and during apprenticeship. A powerful influence in this direction was also exerted by the social environment, where dignity of manual work was held in high esteem and prestige given to integrity, creative work and self reliance. It would not be out of place to mention that in and around the industrial basin of Ruhr, monuments depicting miners and blacksmiths are erected in town halls, public places and factories to pay homage to the early pioneers who laid the foundations of the present day industry.
5. SCOPE TO PROFIT FROM THE WEST GERMAN EXPERIENCE
5.1 Successful adaptation and improvisation from what was available, played a decisive role in the earlier stages of German recovery. In this process the Germans have gained valuable experience in harnessing primitive methods and equipment side by side with the modern counter-parts, to obtain the maximum volume effect from a given set of resources. Our problem at the moment is similar and we can learn a lot from the techniques of adaptation and improvisation that were employed by the Germans.
5.2 Germans are characteristically meticulous and thorough, with a long standing tradition of perfecting the detail and then precisely codifying the perfected matter for training, instruction and general application. This has enabled them to establish a unique harmony between what is taught and what is actually practiced at the work level. In our case, industrial tradition has to be deliberately created with limited capacity. As such, the technique of systematically codifying perfected material is the most practical one for our purpose. Our task would be considerably facilitated if we draw on German industrial know-how in an organized manner. The fact that precise practical details of that know-how exist in writing, would greatly simplify the process of transferring the same.
5.3 The next crucial field, in which German methods and experience can provide us with a strong support, is technical training and instruction. It is possible to obtain from Germany comprehensive and dependable training material, syllabi of training, text books, practical exercises, techniques of trade testing and evaluation, etc. It is the absence of precisely this material, which has handicapped the quality of our training and efficiency of industrial man power utilization. Here it would not be out of place to mention that even in a country like the U.K., it was found worthwhile to depute a specialist team under the auspices of the Birmingham Productivity Association to make a study of German training practices, and from the report of the team, it is evident that the study was considered fully justified.
5.4 For purposes of our railway workshops, a lot of what has been referred to in the preceding paragraphs, and much more, is available with the German Federal Railways. Their pattern of traction is similar to our own: predominantly steam and progressively moving towards diesel and electric; and their workshop division possesses valuable experience of having successfully solved problems similar to what are confronting our workshops at the moment. They have extensively codified their basic data and practice know-how, and this includes considerable original work in the sphere of rationalization and cost control in mechanical workshops. It would greatly facilitate our development work, if we could draw, in an organized manner, on the experience of German Federal Railway Workshops.