Page 100 - The Making of the German Post-war Economy

THE SOCIAL DEMOCRATIC PARTY 73

Despite these warnings, and the CDU’s relatively high percentage of votes
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in the first state legislature elections in April and May 1947, Kurt
Schumacher still assumed that the Christian Democrats would fall apart as
soon as the public identified them as reactionary Catholics and bourgeois
capitalists. Nevertheless, the party chairman sought to coordinate the
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activities between the party and its parliamentary group to publicise its
position; finally, the upcoming Landtag, local and communal elections in
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the Saarland, Bremen and Wuerttemberg-Baden (October and December
1947 ) required harmonious appearances and concerted action.
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When the more market-oriented Ludwig Erhard succeeded Johannes
Semler as Director of the Administration for Economics in the Bizonal
Economic Council on 2 March 1948, the SPD had an enemy who
promised to facilitate parliamentary and public campaigning. The
following day, a report presenting Erhard as a protégé of the American
occupying power appeared in the popular news magazine Der Spiegel in
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which leading Social Democrat circles who had planted the story hoped to
discredit the newly appointed director. Similarly, in parliament, the
chairman of the SPD parliamentary group, Erwin Schoettle, attempted to
exert pressure on the politically still relatively inexperienced Ludwig
Erhard by unambiguously warning him against any intended measures that
were not consistent with the Social Democrats’ viewpoint. Erhard,
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however, was not at all intimidated by their actions; on the contrary, he
self-confidently introduced a bill that extended the scope of his
responsibilities. According to the wording of this Übergangsgesetz über
Preisbildung und Preisüberwachung, the so-called ‘Preisgesetz’ (Pricing Law),
henceforth, the Administration for Economics and its director were in
charge not just of macroeconomic policy but also price policy. While the
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Social Democrats agreed with the idea that a single authority be
responsible for pricing, they pushed for an independent agency. Although
even some Christian Democrats, such as Andreas Hermes, shared their
opinion, Erhard eventually prevailed and the Economic Council passed
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the Pricing Law on 10 April 1948; the SPD merely succeeded in limiting
its period of validity to the end of the year.
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After Ludwig Erhard introduced his concept of a Social Market
Economy to the Economic Council at its fourteenth plenary meeting on
21 April 1948, not just Social Democrats but also Christian Democrats,
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such as the Director of the Administration for Alimentation, Agriculture
and Foresting, Hans Schlange-Schöningen, had second thoughts about the
Director of the Administration for Economics and his audacious project.
In view of the nationwide demonstrations against food shortages in spring
1948, Schlange-Schöningen endorsed planning and government control of
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the economy. Seeing no remaining political scope for liberal