Page 127 - The Making of the German Post-war Economy

100 THE MAKING OF THE GERMAN POST-WAR ECONOMY

to the insistence of the Social Democrats. Nonetheless, the Social
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Market Economy received constitutional assistance. According to the
ordo-liberal economists Wilhelm Röpke and Franz Böhm who were
among the first to point out and examine the correlation between
Rechtsordnung (legal order) and Wirtschaftsordnung (economic order), the
democratic liberal political system necessitated for its completion the
market economy. The political system ultimately geared toward the
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preferences of the individual required a corresponding institutional
mechanism by which the individual could voice his preferences, i.e. the
market or set of markets. In recognising and considering precisely this
interdependence of constitutional and economic order, Konrad Adenauer
and Ludwig Erhard paved the way for the Social Market Economy not
only in political bodies but also in the general public. Acting on the
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assumption that in view of the recent National Socialist dictatorship, the
German people wished for political democracy, they continually
emphasised the correlation between political and economic freedom.
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Decisive influences on the communication and finally the implementation
of the Social Market Economy were the legislative Administration for
Economics of the Economic Council and the constituent Parliamentary
Council, and most importantly of all the interplay between both bodies
and their chairmen, namely Ludwig Erhard and Konrad Adenauer.
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Whereas Konrad Adenauer and Ludwig Erhard saw the councils in
Frankfurt and Bonn as decisive political instruments, Kurt Schumacher
and the majority of the SPD instead considered the Basic Law to be a
temporary solution until a constitution for a united Germany was
formulated, and regarded the Economic Council and its Administration
for Economics as mere provisional institutions with limited room for
manoeuvre, hence unable to solve the immense problems of the
immediate post-war years. Indeed, all laws of the German institutions
required the approval of the Allied Bipartite Board, and furthermore, parts
of the CSU deemed the bizonal administrations in Frankfurt to be
incompetent; however, this sentiment was mainly due to conflicts of
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spheres of interests and influence between Bavarian federalism and
German centralism. In retrospect, however, while the Union parties, and
Ludwig Erhard in particular, effectively seized the increased political
opportunities to implement and communicate their economic ideas, the
leadership of the SPD both underestimated the decision-making power of
the bizonal administration and the opportunity therein to communicate a
socialist economic programme. While initially the Economic Council and
the Administration for Economics generally followed guidelines issued by
the occupying powers and, furthermore, were preoccupied with
administrative matters to the detriment of questions of regulatory policy,