I explain my main reasons for embarking on my book project. As always in research development, it’s about questioning established contentions, myths, or assertions, in this case that Ludwig Erhard was the father of the West German currency reform. The economist Charles P. Kindleberger, an OSS colleague and friend of Tenenbaum, motivated me in the late 1990s to embark on my research project. As Kindleberger and I were also friends from my year at Harvard University in 1975–76 until his death in 2003, I felt a special obligation to take Tenenbaum’s life and his most successful currency reform as the most important turning point in German economic history into the focus of my research. Tenenbaum was Jewish. The stealing of his merit by Ludwig Erhard was – in my view – an expression of postwar German antisemitism. I also make my readers aware that I not only present my research results, but also the often-adventurous ways I obtained them.

I start with the international political setting after VE-day and the disagreements, also over reparations, that the four Allied Powers ran into after the Potsdam Agreement of August 1945. This stipulated that Germany should be treated as a single economic unit by the Allied Control Council. The Council of Foreign Ministers was established to prepare a peace treaty with Germany. It failed despite its several conferences 1945 to December 1947. For US Military Governor in Berlin, General Lucius D. Clay, Gerhard Colm and Raymond Goldsmith, Jewish economists who had emigrated from Germany 1933/34 to the US, had produced a currency-reform plan already in May 1946. Clay tabled it in the Allied Control Council in September 1946, where it got stuck. These developments progressively increased the danger of a partition of Germany. A separate currency reform would automatically entail political partition. I pinpoint the day the dice were cast in Washington DC 1. on giving up on a currency reform with the Soviets: 11 March 1948, and 2. on printing Deutschmarks in the USA: 13 October 1947. I then deal with Tenenbaum’s leading roles among all Western currency experts and in the top-secret meeting with eleven West German financial experts at Rothwesten. Lastly, I analyze the reform of 20 June 1948, C-day, itself, its consequences, and assessments.

Here I concisely summarize Tenenbaum’s currency-reform activities in West Germany. I pick up the question what role the Reich Group Industry, managed by Ludwig Erhard’s brother-in-law, who in 1943 commissioned Ludwig Erhard’s study "War Financing and Debt Consolidation," had played in Erhard’s second turncoat behavior up to his unsolicited application for commissions by the US Occupation Power. I praise General Lucius D. Clay’s shrewdness in using Erhard with his free market rhetoric as a pawn in the struggle to keep socialism and communism in West Germany at bay. I advance a thesis why Erhard appropriated Tenenbaum’s merit. In the first two postwar decades, it seems to have been mentally impossible for the people of defeated Germany – still infected by Nazi antisemitism - to recognize and appreciate the fact that the basis of West Germany’s resurgence, the currency reform of 1948, was owed to Jewish masterminds. I conclude with a comparison of Tenenbaum’s and Erhard’s characters.

After his return to Washington DC from his MSA mission to Athens (April 1952 to June 1953), Tenenbaum, in 1953, founded the Edward A. Tenenbaum Company for financial consulting in Washington DC. In February 1954, he announced to the press the formation of a partnership named Continental-Allied Company, Inc. with his former immediate boss in OMGUS Berlin, General Lucius D. Clay’s Financial Adviser Jack Bennett. The company’s purpose was described: “it will accept commissions for international and United States investments, exports and imports, consultation and advice in financial, economic and trade matters, as well as public relations.” The company mainly produced reports on financial and economic problems of developing countries, either commissioned by their governments or by the World Bank. In 1969, Tenenbaum changed focus. Rather than in financial consulting, he became more interested in sharing with his wife a greenhouse business on their own large property in rural Herndon VA, where the family had lived since 1949. By 1956, four kids had been born. The youngest, Charlie, was struck by a car in March 1969 in Herndon VA and was immediately dead. A second tragedy hit the family when Edward Tenenbaum was killed in a car crash at the age of 53.

This chapter marks the starting point of our investigation of actual policy solutions to tackle armed conflict. When a doctor has reached her diagnosis, she must then decide on the right medication to administer. Similarly, while economists started by studying the drivers of political violence, in recent years increasing efforts have been made to understand how to cut the Gordian knot of conflict. As argued in this chapter, a first-order factor is the institutional environment, and in particular the need to give a voice to all citizens and groups in society. Democracy is desirable, but without proper safeguards it can have a dark side and result in blood being spilt. Furthermore, the type of democracy and the provisions of sharing power between groups matter. Closer inspection of local-level power-sharing in Northern Ireland, the building of modern Switzerland after its civil war in 1847, the difficulties for current democratization in Iraq and the franchise extension during the British Age of Reform drive this discussion forward.

The starting point of this chapter is the observation that would-be dictators are abundant around the globe, but some succeed in setting up and sustaining a rebel army while others do not. As argued in this chapter, a key ingredient for rebel success and conflict longevity is funding. One source of financing is the stolen spoils of nature. Think, for example, of blood diamonds. Beyond this particular example, we also discuss in this chapter systematic evidence on how access to mineral rents triggers an escalation of fighting activities of armed groups. In addition to resource rents, it is foreign funding that results in prolonged conflict, and may lead to proxy wars between fighting factions supported by rival foreign powers. The destructive potential of these sources of funding is examined by drawing on examples and empirical evidence from Angola, the Democratic Republic of Congo and India.

This chapter discusses the impact of particular policies at the global level. It turns out that coordination and common standards can make a big difference. First, it is shown that the global traceability of minerals can cut rebel funding significantly. Next, the role of monitoring multinationals is highlighted. Notably, recent studies have pinpointed the importance of corporate social responsibility of mining firms, revealing that the best-run mineral extractors may have a beneficial impact on the local population, while poorly run firms yield disastrous outcomes. Further, given that wars tend to trigger a series of vicious cycles, there is a powerful case for facilitating refugee admission. It is discussed how a well-coordinated refugee policy can reduce violence perpetuation over future generations. Next, we investigate what role international trade can play for fostering peace and what harmful effects arms trade can entail. It is shown how arms-producing countries can – without bearing large economic costs – reduce the ability of bad regimes to attack their civilians. Finally, the importance of a rule-based international order and a well-managed green transition is highlighted.

This chapter stresses the importance of smart idealism, and outlines how global public opinion – and all of us – can play a crucial role. We cannot simply rely on our politicians to “do the right thing,” as either of the two components of smart idealism may be missing. Ideological bias may result in policies falling short of being smart or failing to be idealist, namely when politicians’ incentives are distorted. Electoral terms typically of four years result in a bias towards short-run policies (at the detriment of the lengthy, but crucial task of building peace), and often there are personal benefits for politician when cutting shady deals with despots. To get the incentives right, public pressure must ensure that the reelection chances of our politicians crucially depend on fostering peace at home and abroad. If voters care about this, then politicians will as well – whether out of intrinsic motivation or just to get reelected. As shown in this chapter, recent evidence highlights that scrutiny and attention from the world press and the public at large is a powerful rampart against repression.