This essay tries to explain German attitudes towards freedom by historical and geographic factors. If freedom, scientific progress and the industrial revolution in Europe - in short, the “European Miracle” - arose due to political fragmentation and competition among rulers, this “miracle” should have been most spectacular in Germany, Europe’s most fragmented language area. Why was it not? I show that competition among the princes favoured freedom and economic development in Germany as well. But there were other factors special to Germany which counteracted these effects. In the first place, German states were involved in more destructive wars due to their precarious location in the centre of Europe and their lack of natural borders. Moreover, since worldly power was more fragmented, the power of the Church was more pervasive. The Church has an ambivalent attitude towards economic freedom. What distinguishes Germans from their neighbours is, therefore, the deep conflict between the freedom required by external conditions and their moral preferences inherited from the past. After World War II, West Germany imported a number of freedom-enhancing economic policies from the US. My analysis shows that only two of the seven components of this American heritage have been kept unimpaired.