Page 162 - The Making of the German Post-war Economy

1948 – ASPIRATION AND APPREHENSION 135

became occasionally visible in the harassment of shopkeepers and
merchants; protests on occasion turned into riots in various cities.
The people blamed mainly Ludwig Erhard for this misery and economic
inequality. Eventually, to him as former Chairman of the Special Bureau
for Money and Credit and Director of the Administration for Economics
in the Bizonal Economic Council, were assigned both the task to prepare
the currency reform (though the scheme was actually devised by the
Western Allies, and German involvement was restricted to the subordinate
task of drafting the laws and regulations) and that of cancelling existing
economic controls. The Wirtschaftsdiktator (economic dictator) as Erhard
was then often named became one of the most unpopular politicians,
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and his economic programme of a Social Market Economy seemed to
have failed. Multiple protest rallies of thousands of unionised workers and
civil servants took place and various unions led by the Chairman of the
Federation of German Trade Unions, Hans Böckler, criticised in particular
the pricing policy and the pay freeze. The majority of the public
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(between 81 and 94 per cent depending on the merchandise in question)
considered prices far too high, and consequently 70 per cent favoured a
return to price control. Thus, Erhard was vehemently criticised for his
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timing of economic liberalisation within the CDU/CSU and even within
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his circle of (political) friends as he remarked at a later stage: ‘It was worse
that even good friends should have gone so wrong as to think that my
economic policy would land Germany in disaster.’
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After increasing explicit criticism on the part of the political left and
right, various organisations, such as the Deutscher Rentnerbund (Union of
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Retired Persons), the Wirtschaftsgemeinschaft selbständiger Ingenieure (Economic
Community of Self-Employed Engineers), the Verband der
Versicherungsunternehmen (Association of Insurance Companies) or the
Reichsbund der Körperbeschädigten, Sozialrentner und Hinterbliebenen (Federation
of the Maimed, Retired and Bereaved), numerous municipal councils and
mayors, but also individuals who considered the introduction of a
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market economy at that stage most antisocial, the CDU/CSU ran indeed
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the risk of losing votes at large in the upcoming local elections taking
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place in seven out of thirteen Länder in late autumn 1948. Increasingly,
the SPD, which had already unsuccessfully submitted a motion of no
confidence against the Director of the Administration for Economics on
17 August 1948, seemed to be right after all and Schumacher was
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perceived as the most competent politician at that time. Despite the
public’s criticism of Erhard’s economic policy and the prevalent
unpopularity of the Economic Council, considered to be unable to
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correct the disparity between wages and price level, against expectations,
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the majority of the Germans (65 per cent) did not intend to alter their