Well said. The 'war account' ignores the economic 'miracle' of the West German economy during the 1950s. I think there are other reasons for the downfall during the late 60s and early 70s.
The West German economy may have been doing well, but the camera manufacturers were already on their way out. The Contax IIa was discontinued in 1961, for example. They just couldn't compete.
Why? All those lovely patents going bye-bye due to the war set the groundwork. Without the Leica shutter, there would be no Canon or Nikon rangefinders in the late 40s or early 50s. The best lenses were really tweaks to existing designs (the 105/2.5 I love soo much is really a rip-off of a Zeiss lens). There would have been nothing to build on (speaking of building, an electronic version of the basic shutter design wasn't discontinued by until 2000 or so with the end of Nikon F3 production) if those patents were still valid.
The Japanese business community is also well-known (almost to the point of stereotyping) for innovation. Just remember: as late as the 1870s, Japan was still basically a late iron age society on par with the Roman Empire with horses as the major mode of transportation and swords being used to settle disputes. Within 30 years, they defeated a major western power in an all-out slugfest between top-of-the-line battleships (Russo-Japanese War) and helped the West put down anti-western rebellion (Boxer Rebellion). This is a prime example of the nation's ability to innovate over a very short time.
By the beginning of the 1950s, they were able to build competitive cameras and lenses, and by 1959, several companies had figured out how to take the German and Russian SLR concept and turn it into a reliable, efficient and convenient photographic machine.
The Germans had centuries to build its optical industry to the juggernaut which it was during the Third Reich. The Japanese did it in less than half a decade because of a good work ethic and a very, very cooperative market
As far as the American camera industry, I fail to see how an Argus C3 can compete with a Nikon F (nobody was making the comparison, and that's my point... there was no real top-level miniature camera manufacturer, as the best Kodak cameras were German). The only "pro" cameras made in the US were 4x5, and as 35mm came more popular for working photographers, the companies simply did not make the transition. Also, unionized optical manufacturing workers are expensive, as opposed to workers in Asia being paid considerably less. Lower costs means more money for R&D.
Another interesting bit leading to the rise of the Japanese camera industry is the strong boost in sales given by selling Japanese cameras in US Post Exchange shops to soldiers and sailors in the far east after WWII and during the Korean War. You can see evidence of this by the <EP> diamonds on many surviving cameras (especially Canons). They brought home these cheap cameras that were very good and that drove demand, as people were tired of either cheap bakelite cameras made in Rochester or Ann Arbor with mediocre lenses or expensive German cameras.
So; free designs, strong work ethic, a cheap labor force and a willing audience made the Japanese camera industry overpower those elsewhere in the world.
But without the war, I would bet none of it would have happened. You would still have German company names, but in the same way Contax lived in the 80s and Zeiss Ikon lives today -- an Asian camera factory with some Germans doing QC.
