Ludwig Erhard


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(b. 4 Feb. 1897, d. 5 May 1977).

West German Economics Minister 1949–63; Chancellor 1963–6

A professor of economics and economic adviser to the US administration in Germany from 1945, Erhard is generally remembered as the ‘father of the German economic miracle’. He served as the economics director of the English‐ and American‐controlled zones of Germany from March 1948, and then as West German Economics Minister. In these positions, he realized a social market economy, a capitalist economy in which the state maintained a strong role in the provision of social welfare and market regulation. Defying strong domestic opposition and the wishes of the Allies, Erhard successfully abolished wage and price controls in 1948. His ‘ordo‐liberal’ policies aimed at creating a stable market economy, as well as strong institutions to guard against the abuse of market power.

 Erhard made a major contribution to the success of the fragile West German political system. Through his successful economic policies, average economic growth was around 8 per cent per annum. This translated into rapidly improving living conditions and the beginning of a consumer society from the late 1950s.

 As Chancellor, Erhard's foreign policy was less focused on France and more directed towards the USA. In domestic politics, Erhard found it difficult to establish his authority, with his predecessor, Adenauer constantly sniping at him from the background. Ironically, it was the economic crisis of the mid‐1960s, as well as growing disagreements with his junior coalition partner, the Liberal Party (FDP), which led to his resignation in 1966.

Subjects: Politics — Contemporary History (Post 1945).

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