<P> Erhard abolished the Reichsmark and then created a new currency, the Deutsche Mark, on 21 June 1948, with the concurrence of the Western Allies but also taking advantage of the opportunity to abolish most Nazi and occupation rules and regulations . It established the foundations of the West German economy and of the West German state . </P> <P> After 1950, Germany overtook Britain in comparative productivity levels for the whole economy, primarily as a result of trends in services rather than trends in industry . The Marshall Plan was eagerly adopted in west Germany as a way to modernize business procedures and utilize the best practices, while these changes were resisted in Britain . Britain's historic lead in productivity of its services sector was based on external economies of scale in a highly urbanized economy with an international orientation . On the other hand, the low productivity in Germany was caused by the underdevelopment of services generally, especially in rural areas that comprised a much larger sector . As German farm employment declined sharply after 1950 thanks to mechanization, catching - up occurred in services . This process was aided by a sharp increase in human and physical capital accumulation, a pro-growth government policy, and the effective utilization of the education sector to create a more productive work force . </P> <P> The Germans proudly label their economy a "soziale Marktwirtschaft," or "social market economy," to show that the system as it has developed after World War II has both a material and a social--or human--dimension . They stress the importance of the term "market" because after the Nazi experience they wanted an economy free of state intervention and domination . The only state role in the new West German economy was to protect the competitive environment from monopolistic or oligopolistic tendencies--including its own . The term "social" is stressed because West Germans wanted an economy that would not only help the wealthy but also care for the workers and others who might not prove able to cope with the strenuous competitive demands of a market economy . The term "social" was chosen rather than "socialist" to distinguish their system from those in which the state claimed the right to direct the economy or to intervene in it . </P> <P> Beyond these principles of the social market economy, but linked to it, comes a more traditional German concept, that of Ordnung, which can be directly translated to mean order but which really means an economy, society, and policy that are structured but not dictatorial . The founders of the social market economy insisted that Denken in Ordnungen--to think in terms of systems of order--was essential . They also spoke of Ordoliberalism because the essence of the concept is that this must be a freely chosen order, not a command order . </P>

What kind of economic system did west germany have