Why is Germany so Rich?

Credits
- Research: Mrs Scope
- Audio: Seb. Soto
- Writing and Voice Over: Avery from History Scope

Social Media

Germany’s economic success began in the Holy Roman Empire, where hundreds of German-speaking states traded along rivers like the Rhine. This network turned cities like Hamburg and Solingen into manufacturing and export powerhouses, famous for steel and cutlery. Prussia discovered vast coal and iron deposits, accelerating German industry by creating the Zollverein, a customs union that removed trade barriers among the German states.

Infrastructure played a key role. Canals, macadam roads, and the first German railways connected regional markets, fueling more economic growth and letting German manufacturing flourish. By the mid-19th century, German states invested in vocational education and technical schools, training skilled workers to innovate in steel, chemistry, and electrical devices. Companies like Siemens became global leaders, laying telegraph lines across Europe.

After German unification in 1871, the new German Empire protected its domestic industries with tariffs while building a world-class industrial sector. Although Germany lagged in agriculture, its steel mills, chemical plants, and machine production soared. Two World Wars devastated the country, but post-WWII reconstruction (the “Wirtschaftswunder”) revived West Germany through significant investment, a focus on Small and Medium-Sized Enterprises (SMEs)—often called the Mittelstand—and a strong apprenticeship system. This system nurtured high-quality manufacturing, where specialized SMEs excelled in niche products.

In 1990, German reunification merged East Germany and West Germany at great financial cost. Despite immediate recessions, Germany re-emerged as Europe’s largest economy. Membership in the European Union, coupled with the introduction of the euro, furthered Germany’s position as a dominant export nation. It encouraged the EU’s eastward expansion, leveraging lower-wage production sites in Central Europe while developing new consumers for German goods.

Though Germany enforced austerity to keep debt under control—both in the 1980s and during the eurozone crisis—it now faces challenges like infrastructure underinvestment and social inequality. Nevertheless, it maintains its reputation for high-quality exports, world-class vocational training, and efficient SMEs. Today, Germany continues to rank among the wealthiest countries, thanks to its industrial diversity, robust trade networks, and a centuries-long tradition of innovation and cooperation.

Sources
Websites

Books
K. Hoyer (2022) Blood and Iron – The Rise and Fall of the German Empire 1871-1918. The History Press. Gloucestershire.
J. Heinzen (2018) Making Prussians, Raising Germans. Cambridge University Press. Cambridge.
U. Pfister - Economic Growth in Germany, 1500–1850. The Journal of Economic History , Volume 82 , Issue 4 , December 2022 , pp. 1071 - 1107
C. Brinkmann - The Place of Germany in the Economic History of the Nineteenth Century. The Economic History Review, Vol. 4, No. 2 (Apr., 1933), pp. 129-146
R. Fremdling, R. Tilly – German Banks, German Growth, and Econometric History. Journal of Economic History, Vol. 36, No. 2 (June 1976), pp. 416-424
G. Fels, H-P. Froehlich - Germany and the world economy: a German view. Economic Policy (April 1987), pp. 178-195
N. H. T. Albers, C. Bartels, M. Schularick (2020) : The Distribution of Wealth in Germany, 1895-2018, ECONtribute Policy Brief, No. 001, University of Bonn and University of Cologne, Reinhard Selten Institute (RSI), Bonn and Cologne
G. Alfani, V. Gierok, F. Schaff - Economic Inequality in Preindustrial Germany, ca. 1300–1850. The Journal of Economic History , Volume 82 , Issue 1 , March 2022 , pp. 87 - 125
H. Herr, Z. M. Nettekoven (2017) The role of small and medium-sized enterprises in Development. What can be learned from the German experience. Freidrich Ebert Stiftung.

[Browncheesboi]

You swapped the east and the west designation at around 7.00

[thorH.]

Most Germans actually have very little in savings and especially reel estate. Most people in Germany live on rent and with our pension system being based on the next generation paying for the former, we do not save a lot privately.

[unematrix]

TWO videos in ONE month? Stop it Avery, my brain can only produce so much dopamine!

[conors]

As always, if a billionaire gets into a lift with 5 poor people, economic theory tells you the lift has 6 hundred millionaires in it,

[diesesphil]

wow, as a german history and economic nerd I really loved this video and the effort you put into it. definetly deserves a sub.
I noticed some minor mistakes or leftouts but nothing dramatic

[nondjmaster]

Request: Why is The Netherlands so rich?

[ShxhzEditx]

Germany and Japan are two rare examples of governments that are like: Just give me a land and I'll develop on it. Despite both being totally demoralized after WW2.

[PauloZunguze]

Wow was not expecting another video so soon, but I'm not complaining

[RazgrizGirl]

@7:00 I think you meant west to east rather the east to west? sorry if I'm being dumb the visual was a little confusing

[Stadtpark]

Title should be: why are there successful companies in Germany? - Telling the 99% that they are rich, will only make them angry. It is the 1% that are rich, like in every country in the world. - Also: average income is a bad measure: use median income.

[abdullahdaniyal]

Germany and Japan are fascinating to me.
One for its innovation, other for its culture.

[hilding]

Short answer, because we used to be smart, hard working and have good geography. Now I watch the video and see if some of my arguments are in here.

[kygigni]

Nice video, that was a nice summary of more than 150 years of history perfectly explained.

[Lokipoky-ou]

Looks great already, great work as always!

[skibidicoffee]

6:45 the graphic you showed or your script was wrong because you said resources in the east even though the thing shows west

[Antivarium]

lol I thought it said “Why is Germany so Reich?”

[mikegoossens]

Absolutely loving the large amount of graphic jokes in this one

[Wingedhussarenjoyer]

Great video man. Thanks for making these videos so digestible. I love listening to ur videos while doing chores ❤

[gengarboi]

Another importnt aspect of Germany's fortune I think comes from the fact that other Western countries WANTED Germany to be rich and strong, at least after WW2, as a part of their strategy to deter communist expansion.

It was so much so to the point where France, a county historically not exactly shy to expansion, and which was practically about to annex the Saarland that they had ripped away from Germany and made a protectorate, was willing to hand it back to a country that had just a few years ago completely occupied their country.

I mean, why squabble over territory and waging war when you can get a lot more money by just being good allies?

[Eli-pjxm]

Why is Germany so rich? You must be high on something.