There's a history lesson over at the Mises Economics Blog.

I'm sure you're all familiar with the "Wirtschaftswunder" or economic miracle of post-WWII Germany. The development aid of the Marshall Plan was only a tiny part of it (and you're undoubtedly familiar with the effectiveness, or lack thereof, of development aid elsewhere):

On the evening of June 20, 1948, Erhard went on the radio to announce the particulars of what came to be known as "the bonfire of controls." The first part of the Erhard-Röpke plan was monetary reform and the introduction of a new currency, the Deutschemark. One new mark was traded for 10 of the old Reichmarks. The money supply shrank by more than 90 percent, bringing postwar inflation a quick end. The second reform eliminated controls on prices and wages and reduced business and personal taxes. Within days, shops began to fill with items for sale, the food shortages began to disappear and business investment returned.

These postwar reforms created a strong, market-oriented system that allowed the West German[2] economy to perform brilliantly for several decades. Per capita GDP tripled between 1950 and 1974. Unemployment shrank to a mere 2.5 percent as the country added 8 million jobs. An economy that had grown on average between 1913 and 1950 by only 0.3 percent grew between 1950 and 1973 at 5.7 percent — nineteen times as fast, averaging over 8 percent annually during the 1950s. Germany shook off defeat and became a leading player in the world economies, outperforming Britain, France and many others. Only Japan among the major economies of the time had a faster growth rate between 1950 and 1973.

Erhard's policies brought a postwar economic boom, but their very success led to the nation's current economic malaise. Thinking that they had found a Golden Goose of endless prosperity, the German government, with the full backing of electoral majorities, began to adopt policies beginning in the 1960s that moved the country away from free markets and back towards the very controls Erhard had abolished. Tax and regulatory burdens grew. Mandates on wages and working conditions created labor-market rigidities and price controls reduced flexibility in the economy. Increasingly generous payments to unemployed workers fed a decline in Germany's labor market participation rates. As is generally the case, the effects of these policies lagged their implementation, but the effects were precisely what standard economic theory predicts when people's incentives are changed by increasing welfare state programs.

Here is the link. They have comments.