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Analysts of the post-war German "economic miracle" (Wirtschaftswunder) have diverged sharply over its origins and dynamic. The well-known Olso thesis stresses the importance of a radical break in institutions and interests, while other historians have recently posited the centrality of continuities from the fascist era to the Bonn republic. This article examines the history of Volkswagen, the largest firm in the crucial automobile industry, to understand the balance between continuity and change and systemic and conjunctural factors in the impressive success of this firm. Tolliday rejects the Olsonian notion of institutional "cleansing" and argues that the legacies of both fascism and the British Occupation were vital but that during the 1950s overlapping institutional structures, argumentative interest groups and rival political coalitions at VW could well have choked off growth in the absence of quite favorable circumstances.
The core of Germany's post-war economic success has been its remarkable performance as an exporter of manufactured goods, with machinery, chemicals and automobiles playing a dominant role.
Yet there are very few studies of the nature and roots of this manufacturing success. In contrast, the Japanese manufacturing sector has been put under the microscope by Cusumano, Friedman, Anchordoguy and others,(1) and the strengths and weaknesses of U.S. manufacturing have been widely debated.(2)
Discussion of Germany's successful recent economic performance has tended to focus on its liberal economic policies or its distinctive corporatist institutions,(3) but very little has been written on the technical and strategic roots of German corporate success or on the evolution of postwar institutional relationships of industry and government.(4) This has not prevented certain boldly stylized views from dominating popular and academic perceptions of the roots of recovery and rapid growth.
The boldest and best-known view was set out by Mancur Olson in The Rise and Decline of Nations (1982). Olson argued that, in stable advanced economies, the power of special interest groups or "distributional coalitions" accumulates over time, resulting in a pattern of institutional sclerosis in which these groups increasingly impede economic efficiency, dynamism and growth. Accordingly, the abolition or emasculation of these coalitions, notably through the upheavals of war and occupation, can create the conditions for rapid growth. This was what occurred in West Germany and Japan after the Second World War where "institutional life...