ABSTRACT
The Prussian-German state, which had earlier survived defeat and revolution, was now irretrievably doomed. All the allies ranged against Germany were committed to its destruction. The irrationality of vainglorious nationalism had been particularly apparent in the economic sphere, and it was from the ranks of German economists that the most important theoretical proposals for the rejuvenation of post-war Germany were to come. The neo-liberals were determined that the free market should be really free, undistorted by cartels or monopolies, and that tariff policies should be liberalized to encourage free trade. They believed that a fundamentally healthy system had been perverted in Wilhelmine Germany. In post-war Germany, on the other hand, the laissez-faire notion that the state should confine itself to external defence and internal policing was rejected by the neo-liberals as reactionary dogmatism. The miseries of the post-war economic situation in Germany, with an almost worthless currency, and with barter and the black market replacing normal trading conditions.
