What led to the rapid economic growth seen in West Germany and Japan after World War II? Raymond G. Stokes’ Ruins to Riches (2024) provides a comprehensive examination of how both countries recovered from the war and emerged as major economic powers. The book advances a predominantly (although not wholly) institutionalist view that ascribes primary importance to “a potent mixture of subtle state action, effective industrial organisation, benign labour relations, key companies, and fundamental technologies” (p. 3). This argument shifts the focus away from the idea of an economic “miracle” (hence, a “resurgence”). Additionally, for Germany, Stokes places much less emphasis on the Marshall Plan. Instead, the explanation is largely based on historical contingency, specifically the actions and decisions made by corporations and governments since 1945.

The book advances the notion of “cooperative capitalism” to frame its argument. Elaborate networks of industrial giants, financial institutions, trade unions, and government bodies created the conditions crucial for economic recovery. Whereas Japan featured the dominance of large bank-centered business groups (the keiretsu), Germany built upon the work of its prominent trade associations and universal banking system. For both countries, close coordination between the public and private sectors was important for sustained growth.

One of the book’s strengths is its ability to assess the similarities between Germany and Japan without overstating them. Both were relatively late to industrialization and overseas imperialism, especially compared with their counterparts in Western Europe. They also had limited access to vital natural resources, except for water and, in Germany’s case, coal. More importantly, there was a significant degree of convergence. Severe wartime destruction produced national identities that relied heavily on strong economic performance in the postwar years. The ensuing “single-minded dedication to GDP growth and increased standards of living” meant that industrial expansion could be prioritized, albeit at a high environmental cost (p. 139).

Historians of consumption will also find this book of great interest. Chapter 5 explores how the two nations experienced a drastic rise in domestic consumption, which enabled a broad base of workers to purchase luxury goods. By the 1970s, ownership of consumer durables in Germany and Japan had risen to levels surpassing those in the UK and, in some cases, matching (or nearly matching) those in the US. These trends then allow Chapter 6 to show how firms were able to invest in technological innovation and expand their exporting capabilities at a rapid pace.

Although Stokes’ book mainly focuses on West German and Japanese businesses and government officials, it also acknowledges several global factors. Both countries largely benefited from undervalued exchange rates and the arrangements of the Bretton Woods system. Additionally, military protection during the Cold War afforded them the opportunity to reinvest their resources domestically. Even so, the later decades of the century brought unprecedented challenges. As Japan dealt with the reverberations of a speculative bubble, Germany struggled with the process of reunification and its persistent fiscal issues.

Showing the negative dimensions of growth is thus another key intervention of the book. Economic development may have resulted in an unprecedented rise in standards of living and new connections to international markets. Yet this progress came at a high cost to domestic populations. Chapter 7 explores the ecological harm caused by industrialization, particularly its effects on public health, while Chapter 8 describes the numerous corporate scandals of the postwar years.

There is, however, the lingering question of the extent to which prewar institutions are necessary for understanding postwar developments. In other words, was 1945 an economic Stunde Null? Aside from a few references in earlier chapters, the book provides relatively little information about either country prior to the 1930s. For instance, it argues that the US occupation authorities in Japan “promoted a thoroughgoing overhaul of the system of industrial relations” (p. 52), but it does not explain how the major industrial conglomerates (the zaibatsu) had functioned in the prewar years.

For Germany, the book does provide more historical context. Yet it primarily aims to show how prewar trends were not as impressive as one might have assumed, citing the low level of automobile ownership (p. 61), the limited overseas success of small- and medium-sized family-owned businesses (the Mittelstand) (pp. 79–81), and a gross domestic product (GDP) per capita that lagged behind other advanced industrialized countries (p. 95). It could have been useful to assess whether economic growth was due to other pre-1945 factors, including the structure of the labor force, the strong industrial base, and the shock of the war itself, as other scholars have shown (e.g., Barry Eichengreen and Albrecht Ritschl, “Understanding West German Economic Growth in the 1950s,” Cliometrica 3 [2009]: 191–219; Tamás Vonyó, The Economic Consequences of the War: West Germany’s Growth Miracle after 1945 [Cambridge, UK, 2018]).

Nevertheless, the book covers themes of increasing relevance today. Germany and Japan remain highly industrialized countries, ranking within the top five largest economies in terms of nominal GDP (according to recent International Monetary Fund data). Both are renowned for their advanced technological capabilities. However, the global financial crisis of 2007–2008, limited investment in renewable energy, aging populations, and the vulnerabilities revealed by the COVID-19 pandemic have contributed to their stagnation. The book thus encourages a broader reevaluation of how states can adapt to new challenges. While Stokes rightly acknowledges that Germany and Japan have particular versions of capitalism that may not be wholly replicable elsewhere, their paths of economic development can still offer useful lessons for other countries.