Page 120 - The Making of the German Post-war Economy

THE CHRISTIAN DEMOCRATIC/ SOCIAL UNION 93

plenary meeting of the Economic Council on 21 April 1948 by which he
informed the delegates about his economic concept labelled Soziale
Marktwirtschaft (Social Market Economy), Ludwig Erhard also won the
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majority of party members of the CDU in the British zone of occupation
over to his socio-economic conception. This is reflected in the party’s
principles of economic policy elaborated by the zonal committee on
industry and trade headed by Franz Etzel and the department for
economic policy presided by Adolph Reifferscheidt which were widely in
line with Erhard’s concept of regulatory policy. After Erhard also
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succeeded in convincing the Christian Socialists and worker
representatives of his both market and social economic model, the
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CDU’s change of policy from the ideological, Christian anti-materialism
reflected in the Ahlener Programm with its Gemeinwirtschaft to a more
pragmatic materialism based on the Social Market Economy finally
became noticeable to everyone by the currency reform on 20 June 1948
and official at the party convention in Recklinghausen on 28 August
1948. Indeed, the Director for Economics proved the ability to assert
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himself in both the parliament and the party, but, given that the Social
Market Economy required public debate, for its acceptance or rejection,
its discussion had to go beyond a political audience and Erhard – and the
CDU/CSU – had to convince the sovereign, i.e. the people.
This intention, however, increasingly posed a challenge due to the rise
of prices and unemployment immediately following the currency reform.
The general public euphoria soon gave way to disillusion and
disappointment. Erhard’s economic policy met with severe criticism and
strikes and even disturbances took place in various parts of the Bizone in
the following months. In this situation, the Bavarian Minister for
Economic Affairs, Hanns Seidel, defended Erhard’s course of action
against demands to reverse the liberalisation of the economy by the public,
trade unions, political opponents and even his own party. However, he
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also appealed to the trade associations and the Administration for
Economics to abstain from further price increases in order not to sap the
public’s confidence in the new currency. Equally, Konrad Adenauer,
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who was initially sceptical about Erhard and his concept, backed the
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new Director of the Administration for Economics and his procedure,
both of which were also controversial within the CDU, and praised the
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Social Market Economy as a turn away from collectivism to the valuation
of the individual and the person. At the same time, he urged Erhard and
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leading party members in the Economic Council to take action against
unpopular price rises and unemployment. Thereupon, the
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Administration for Economics issued periodical price comparison lists in
order to inform consumers and started the so-called ‘Jedermann-Programm’