Ludwig Erhard

Ludwig Erhard

[air-hahrt; Ger. er-hahrt]
Erhard, Ludwig, 1897-1977, German political leader and economist. In Nuremberg he rose to be director of the institute for economic research. Dismissed (1942) by the Nazi regime, he then headed the institute for industrial research. He introduced (1948) the currency reform that paved the way for West German economic recovery. A member of the Christian Democratic Union (CDU), he became West German economics minister in 1949. In 1957 he was named vice chancellor, and in 1963 he succeeded Konrad Adenauer as chancellor. In late 1966, Erhard's government fell after the four Free Democratic party ministers in his cabinet resigned and left him without a ruling majority in the federal parliament. He headed the CDU in 1966-67. His writings include Prosperity through Competition (1957, tr. 1958).

(born Feb. 4, 1897, Fürth, Ger.—died May 5, 1977, Bonn, W.Ger.) German economist and politician. As economics minister (1949–63), he was the chief architect of West Germany's postwar economic recovery. He achieved what has been called an economic miracle through his “social market system,” which was based on free-market capitalism but included special provisions for housing, farming, and social programs. In 1957 he was appointed federal vice-chancellor, and in 1963 he succeeded Konrad Adenauer as chancellor. His government was troubled by an economic downturn and a budget deficit, as well as Erhard's relative weakness as a leader, and he was forced to resign in 1966.

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"Erhard" redirects here. For the saint of this name, see Saint Erhard. For the founder of est see Werner Erhard.

Ludwig Erhard (4 February 1897–5 May 1977) was a German politician (CDU) and Chancellor of West Germany from 1963 until 1966. He is notable for his leading role in German postwar economic reform and economic recovery, particularly in his role as Minister of Economics under Chancellor Konrad Adenauer after 1949.

Life and work

Born in Fürth, Germany, from 1913 to 1916 Erhard was a commercial apprentice. After his apprenticeship he worked as retail salesman in his father's draper's shop.

He joined the German forces during World War I 1916 as an artilleryman, fought in Romania and was seriously injured near Ypres in 1918. Erhard could no longer work as a draper and began to study economics, first in Nuremberg, later in Frankfurt am Main. He received his PhD from Franz Oppenheimer in 1925.

During his time in Frankfurt he married Luise Schuster. After his graduation they moved to Fürth and he became executive in his parents' company in 1925. After three years he became assistant at the Institut für Wirtschaftsbeobachtung der deutschen Fertigware, a marketing research institute. Later, he became deputy director of the institute.

Due to his injuries, Erhard did not have to join the German military forces during World War II. Instead, he worked on concepts for a postwar peace; however, such studies were forbidden by the Nazis, who had declared Total war. As a result, Erhard lost his job in 1942 but continued to work on the subject privately. In 1944 he wrote War Finances and Debt Consolidation (orig: Kriegsfinanzierung und Schuldenkonsolidierung). In this study he assumed that Germany had already lost the war. He sent his thoughts to Carl Friedrich Goerdeler, a central figure in the German resistance against the Nazi government, who recommended Erhard to his comrades.

After the war Erhard became economic consultant for the American military administration of Bavaria who made him Minister of Economics in the Bavarian cabinet of Wilhelm Hoegner. After the American and British administration had created the Bizone, Erhard became chairman of the Sonderstelle Geld und Kredit in 1947, an expert commission preparing the currency reform.

In 1948 he was elected Director of Economics by the Bizonal Economic Council. On 20 June 1948, the Deutsche Mark was introduced. Erhard abolished the price-fixing and production controls that had been enacted by the military administration. This exceeded his authority, but he succeeded with this courageous step. Former U.S. Chairman of the Federal Reserve Bank Alan Greenspan gives much credit to Erhard's contributions to freeing of product and financial markets in Europe in 1948. Greenspan states in The Age of Turbulence that Ernhard's economic policy contributions were far more valuable to postwar Western Europe recovery than the Marshall Plan.

In 1949 he stood for election in a constituency in Baden-Württemberg for the first West German parliament after the war and gained a direct mandate. Later in the year he is alleged to have joined the Christian Democratic Union (CDU), though this fact cannot be established by any of Erhard's biographers. In September, Erhard was appointed Minister of Economics in the first cabinet of Konrad Adenauer. His party made his concept of social market economy part of the party platform.

After the resignation of Adenauer in 1963, Erhard was elected Chancellor with 279 against 180 votes on 16 October. In 1965 he was re-elected. From 1965 to 1967, he also headed the Christian Democratic Union.

On 26 October 1966, Minister Walter Scheel (FDP) resigned, protesting against the budget released the day before. The other ministers who were members of the FDP followed his example — the coalition was broken. On 1 December, Erhard resigned. His successor was Kurt Georg Kiesinger (CDU), who led a grand coalition.

Erhard continued his political work by becoming a member of the West German parliament up to his death in Bonn on 5 May 1977. He is buried in Gmund, near the Tegernsee. The Ludwig Erhard-Berufsschule (professional college) in Paderborn and Münster are named in his honour.

Erhard's First Ministry (16 October 1963 - 26 October 1965)

Changes

  • 16 June 1964 - Ludger Westrick (CDU) succeeds Krone as Minister of Special Tasks.
  • 1 April 1965 - Karl Weber (CDU) succeeds Bucher as Minister of Justice.

Erhard's Second Ministry (26 October 1965 - 1 December 1966)

Changes

  • 28 October 1966 - Hans-Christoph Seebohm (CDU) succeeds Mende as Vice Chancellor, remaining also Minister of Transport. Johann Baptist Gradl (CDU) succeeds Mende as Minister of All-German Affairs. The other FDP ministers, Dahlgrün and Scheel, also resign.
  • 8 November 1966 - Kurt Schmücker succeeds Dahlgrün as Minister of Finance. Werner Dollinger (CSU) succeeds Scheel as Minister of Economic Cooperation, remaining also Minister of Federal Treasure.

Bibliography

  • Hentschel, Volker (1996) Ludwig Erhard: Ein Politikerleben. Berlin: Ullstein. ISBN 3-548-26536-7
  • Mierzejewski, Alfred C. (2004) Ludwig Erhard: a biography. Chapel Hill, London: University of North Carolina Press. ISBN 0-8078-2863-7

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