Despite two grueling defeats in the last century, Germany has rebuilt itself time and time again, currently the 4th wealthiest country in terms of GDP.
Always an intellectual and economic powerhouse despite immense hardships, at what point were these core values of diligence and responsibility instilled into the nation's core ethos? And by whom?
I'd dispute that there's a special German character regarding diligence and responsibility. Industrial development in what would become Germany originated in Baden and Bavaria in the 1830s and in unified Germany under government supervision, not private enterprise in the 1870s. Imperial Germany's structured industrial development funded a meteoric rise in economic growth from 1871-1873 known as the "Gruenderboom" or the boom period of the founding years. A cartel structure to German industry and banking were the norm while labor relations soured. Despite Bismarck granting all German workers basic pensions and health insurance, Germany had the largest socialist party in the west, the Social Democratic Party (SPD) by the end of the nineteenth century. Strikes were frequent and the quality of life for most workers was very poor. German industry surpassed Britain before the First World War but suffered greatly following the conflict thanks to indemnities imposed by the Versailles Treaty. Despite hyperinflation and other economic woes, Germany was on the verge of recovery in 1929 but still lagged far behind other western countries in GDP and many metrics regarding quality of life like real wages and the material goods and services available. The Nazi economic recovery is vastly overstated. Hitler re-militarized German society providing jobs but no real tangible results in bettering living conditions beyond the standards of the 1920s. Nazi autarky and control over all private business destroyed the economic vitality of Germany. During WWII most of German industry was powered by both voluntary laborers from occupied western European nations and slave laborers (primarily Soviet POWs and abducted Soviet citizens) and foodstuffs and material goods were stolen from occupied nations. Strangely enough, Nazi economist Walter Funk's ideas of a European wide, government sponsored and mediated common market, became one of the many ideas to influence a more benevolent version of resource sharing and tariff reduction or free zones following WWII. Regarding post-1945 German recovery, West German industrial development, financial institutions, and social welfare were partially a product of both the European Recovery Plan (ERP or more commonly known as the Marshall Plan) of 1948 and the influence of American big business and administrative models mainly abandoning cartel based businesses from Imperial and Weimar Germany and the stagnation of Nazi era autarky. West Germany was situated in a pivotal strategic location opposite the Soviet backed Warsaw Pact and thus profited greatly from US investment and security allowing more money to be spent on economic growth. West Germany also played a central role in the formation of the nascent European Economic Community (EEC) with the formation of the European Coal and Steel Commission and the signing of the Rome Treaty in 1957. This economic community created a resource sharing market and mutual recovery for Germany, France, and then other western European nations resulting in an unprecedented period of growth and rise of quality of living standards known as the "Thirty Glorious Years" until 1973. Finally, West Germany greatly benefited from an influx of cheap labor in the form of guest workers, or "Gastarbeiter," in the 1950s and 1960s. Guest workers came from throughout Europe but mostly from Turkey changing the cultural complexion of West German society. West Germany's social democratic style of government, embraced in varying degrees among the right (CDU/CSU) and left (mainly SPD) parties, emphasized social welfare from the "cradle to the grave" - an idea common throughout western European nations.