Published by EH.Net (June 2013)

Jan L. Logemann, Trams or Tailfins? Public and Private Prosperity in Postwar West Germany and the United States. Chicago: University of Chicago Press, 2012. xv + 300 pp. $45 (cloth), ISBN: 978-0-226-49149-3.

Reviewed for EH.Net by Karen A. Kopecky, Research Department, Federal Reserve Bank of Atlanta.

During the postwar period from 1945 to 1973, the U.S. and West Germany pursued different paths to consumerist modernity. In Trams or Tailfins? Public and Private Prosperity in Postwar West Germany and the United States, Jan Logemann (a research fellow at the German Institute in Washington, DC) explores what made these countries? paths so different. Specifically, Logemann assesses how public policy, social norms and the geographical environment shaped each country?s public and private consumption patterns.

The main chapters of the book are split into three parts. Part 1 compares and contrasts public policy toward public and private consumption in the U.S. and West Germany during the postwar period. In this section Logemann focuses on three major contrasts between U.S. and West German consumer policy. First, private consumption and purchasing power was emphasized much more in the U.S. than in West Germany. Second, markets in West Germany were more heavily regulated than in the U.S. and efforts to shift retail towards mass distribution in West Germany were relatively less successful. Third, direct public social spending and public good provision played a more integral role in West German postwar affluence.? He argues that these differences in consumer policies explain why West Germany experienced a much less accelerated transition towards increased private spending and mass purchasing power.

Part 2 focuses on differences in the social attitudes towards consumption in the two countries.? Here, Logemann contrasts two models of consumption: the American model, which emphasized spending on household durables, automobiles, and suburban homes and the German model, which featured greater public spending particularly on public transportation and housing and less spending on household durables. He argues that, in America, households used their growing stock of household durables as a way to measure their success in moving up the economic and social ladder. Thus Americans equated consumption to affluence much more than Germans who cared more about the quality of the goods they purchased and restraint in spending.? As a result, in the U.S., the ?American standard of living? emerged as a common social goal driven by a forever growing and changing set of consumer goods, while in West Germany consumption remained much more stratified by social class. He argues that differences in household spending behavior, views on shopping and materialism, and the ability to purchase with credit in the two countries played an integral role in generating these differences.

Part 3 discusses how the spatial distribution of residential housing and stores evolved in the two countries. The section starts out by contrasting large-scale, residential suburbanization in the U.S. with the preservation of urban living in West Germany during this period.? Logemann argues that in the U.S. residential suburbanization was fueled by guaranteed mortgages and government support of suburban development as opposed to public housing. He contrasts these features of U.S. housing policy with the facts that in West Germany single family homes were more expensive to build and mortgage financing more difficult to obtain. The section goes on to relate suburbanization in the U.S. to the dramatic rise in car ownership and decline in utilization of public transportation.? Logemann contrasts these trends to the more gradual increase in car ownership with continued usage of public transportation in West Germany. He contends that much of the differences in transportation choices between the two countries are due to differences in government policies and preferences.

In the final chapter of the book Logemann explores the differences between the geography of shopping centers in the two countries.? He argues that while many Americans preferred to shop in the suburbs during the postwar period, Germans preferred to spend their shopping and leisure time in city centers.? The suburban pattern of retailing and large-scale distribution systems in the U.S. meant lower prices and greater convenience for American consumers. However, these choices came at the cost of greater geographic segregation of the consuming public and made owning a car a necessity for middle-class consumers patronizing suburban shopping areas. In contrast, in West Germany the urban pattern of shopping meant prices tended to be higher, shopping hours more restricted and class difference in consumption maintained. Benefits included having stores in walking distance, limiting the need for a car, and preserving traditional urban space.

Logemann voices a number of interesting hypotheses as to why U.S. and West German consumption of private and public goods followed different trends over this period. However, he provides limited empirical support for his claims, relying primarily on previous studies and anecdotal evidence to bolster his arguments. While I found some of his arguments quite compelling, the book would benefit from more direct empirical evidence to support its claims.?

One concern I have with the book is that Logemann repeatedly argues that differences in social norms and culture are an important factor in generating the differing patterns of public and private consumption between the U.S. and West Germany. The causality might in fact go the other way. In contrast to West Germany, the U.S. experienced higher and rising real incomes, the availability of low cost housing and household durables, easier access to credit financing, and a lesser need for investment to rebuild after the war. These factors may not only have led to relatively more demand for private consumption goods in the U.S., but also to changes in social norms. In other words, the differences in the evolution of the economic environments in both countries after the war likely had a significant impact on social attitudes towards private consumption, public consumption, and savings. This possibility is never considered by Logemann.

Karen A. Kopecky is a Research Economist at the Federal Reserve Bank of Atlanta. Her major field of study is macroeconomics with particular interests in public finance, household/family economics, and computational methods for macroeconomic modeling. Her publications include ?A Quantitative Analysis of Suburbanization and the Diffusion of the Automobile? (with Richard Suen), International Economic Review (2010).

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