Page 78 - The Making of the German Post-war Economy

THE COLOGNE SCHOOL 51

informed influential minority as necessary but insufficient and rather
aimed to mobilise the information media in order to address the German
people as a whole. In essence, while Müller-Armack can predominantly
claim credit for the conceptualisation and preparatory implementation of
the Social Market Economy, it became the mission and merit of Ludwig
41
Erhard to publicly communicate and politically implement the socio-
economic programme.
42
According to Erhard, the realisation of the Social Market Economy
could not only be achieved by direct contact to both the public and policy-
makers, but also by becoming a decision-maker himself. Thus, the former
Director of the Institut für Industrieforschung (Institute for Economic Studies)
in Nuremberg offered his services to the German Regierungswirtschaftsamt
(Governmental Economic Office) for Upper and Lower Franconia and
shortly afterwards to the American district administration. The US Military
Government, familiar with Erhard’s detailed memorandum on war finance
and debt consolidation in which he advocated a market economy, hired
43
him as economic expert. On 3 October 1945, Erhard was made Bavarian
Minister for Economic Affairs in the cabinet of Prime Minister Wilhelm
Hoegner (SPD). Apart from some articles in the semi-official paper of
44
the American occupying force Die Neue Zeitung, in which he echoed the
ideas of the neo-liberals and stressed the idea that the government was
responsible for stepping into the economy in order to preserve free
competition as a form of the economy that was social because it benefited
all consumers within society, the ambitious minister failed to organise
45
the post-war economy in Bavaria and was laid off by the American
military authorities on 16 December 1946. Due to his contacts to the
liberal economist Adolf Weber, however, the Faculty of Economics at
University of Munich requested a professorship for the dismissed
minister. The contact to Weber, who was the doctoral advisor of Adolf
Lampe, Constantin von Dietze and Fritz Hauenstein, not only earned him
an honorary professorship conferred on 7 November 1947, but also the
contact to the Freiburg economists. Furthermore, due to Adolf Weber’s
advocacy of a major currency reform, Erhard acquired decisive ideas and
knowledge about how to enable the financial and economic reconstruction
of Germany. This in turn helped him to be nominated Chairman of the
bizonal Special Bureau for Money and Credit, which convened in Bad
Homburg on 10 October 1947. This panel finally enabled Erhard to attain
the most decisive post in the reorganisation of the German economy: on 2
March 1948, Ludwig Erhard succeeded Johannes Semler as Director of
the Administration for Economics in the Bizonal Economic Council.
Thus the Social Market Economy entered the political sphere and, as