Ludwig Wilhelm Erhard (German: [ˈluːtvɪç ˈʔeːɐ̯haʁt]; 4 February 1897 – 5 May 1977) was a German politician affiliated with the CDU and the second Chancellor of the Federal Republic of Germany (West Germany) from 1963 until 1966. He is often famed for leading German postwar economic reforms and economic recovery ("Wirtschaftswunder," German for "economic miracle") in his role as Minister of Economic Affairs under Chancellor Konrad Adenauer from 1949 to 1963. During that period he promoted the concept of the social market economy (soziale Marktwirtschaft), on which Germany's economic policy in the 21st century continues to be based. In his tenure as chancellor, however, Erhard failed to win confidence in his handling of a budget deficit and his direction of foreign policy, and his popularity waned. He resigned his chancellorship on 1 December 1966.
Ludwig Erhard in 1973
|Chancellor of Germany|
17 October 1963 – 30 November 1966
|Vice Chancellor||Erich Mende|
|Preceded by||Konrad Adenauer|
|Succeeded by||Kurt Georg Kiesinger|
|Leader of the Christian Democratic Union|
23 March 1966 – 23 May 1967
|Bundestag Leader||Rainer Barzel|
|Preceded by||Konrad Adenauer|
|Succeeded by||Kurt Georg Kiesinger|
|Vice Chancellor of Germany|
29 October 1957 – 15 October 1963
|Preceded by||Franz Blücher|
|Succeeded by||Erich Mende|
|Federal Minister for Economics|
20 September 1949 – 15 October 1963
|Succeeded by||Kurt Schmücker|
|Member of the Bundestag|
7 September 1949 – 5 May 1977
Ludwig Wilhelm Erhard
4 February 1897
Fürth, Kingdom of Bavaria, German Empire
|Died||5 May 1977 (aged 80)|
Bonn, West Germany
|Resting place||Gmund am Tegernsee|
|Alma mater||Goethe University Frankfurt|
In 1916, during World War I, he joined the German forces as an artilleryman. He fought in Romania and was seriously injured near Ypres in 1918. Because of his injury he could no longer work as a draper and started learning economics. He received his Ph.D. from the University of Frankfurt in 1925, for a dissertation written under Franz Oppenheimer.
During his time in Frankfurt he married Luise Schuster (1893–1975), born Lotter, on 11 December 1923. After his graduation they moved to Fürth and he became executive in his parents' company in 1925. After three years he became assistant at the Institut für Wirtschaftsbeobachtung der deutschen Fertigware, a marketing research institute founded by Wilhelm Rudolf Mann and de:Wilhelm Vershofen. Later, he became deputy director of the institute.
During World War II, he worked on concepts for a postwar peace; however, officially such studies were forbidden by the Nazis, who had declared total war. As a result, Erhard lost his job in 1942 but continued to work on the subject by order of the "Reichsgruppe Industrie." In 1944 he wrote War Finances and Debt Consolidation (orig: Kriegsfinanzierung und Schuldenkonsolidierung). In this study he assumed that Germany had already lost the war. He sent his thoughts to Carl Friedrich Goerdeler, a central figure in the German resistance to Nazism, who recommended Erhard to his comrades. Erhard also discussed his concept with Otto Ohlendorf, deputy secretary of state in the Reichsministerium für Wirtschaft. Ohlendorf himself spoke out for "active and courageous entrepreneurship (aktives und wagemutiges Unternehmertum)", which was intended to replace bureaucratic state planning of the economy after the war. Erhard was an outsider who completely rejected Nazism, supported resistance, and endorsed efforts to produce a sensitive, intelligent approach to economic revival during the postwar period.
After the war Erhard became an economic consultant. Under the Bizone established by the American and British administration in 1947, he led the Sonderstelle Geld und Kredit (Special Office for Money and Credit), an expert commission preparing the currency reform in Germany's western zones of occupation. The commission began its deliberations in October 1947, and in April 1948 produced the so-called Homburg plan, elements of which were adopted by the Allies in the currency reform that set the stage for the recovery of the economy.
In April 1948, Erhard was elected director of economics by the Bizonal Economic Council. On 20 June 1948, the Deutsche Mark was introduced. Erhard abolished the price-fixing and production controls that had been enacted by the military administration. This exceeded his authority, but he succeeded with this step.
In the first free elections following the Nazi era, Erhard stood for election in a Baden-Württemberg district and was elected. He was appointed Minister for Economic Affairs, a position he would hold for the next 14 years; from 1957 to 1963 he was also the 2nd Vice-Chancellor of Germany.
A staunch believer in economic liberalism, Erhard joined the Mont Pelerin Society in 1950 and used this influential body of liberal economic and political thinkers to test his ideas for the reorganization of the West German economy. Some of the society's members were members of the Allied High Commission and Erhard was able to make his case directly to them. The Mont Pélerin Society welcomed Erhard because this gave its members a welcome opportunity to have their ideas tested in real life.
Late in the 1950s, Erhard's ministry became involved in the struggle within the society between the European and the Anglo-American factions, and sided with the former. Erhard viewed the market itself as social and supported only a minimum of welfare legislation. However Erhard suffered a series of decisive defeats in his effort to create a free, competitive economy in 1957; he had to compromise on such key issues as the anti-cartel legislation. Thereafter, the West German economy evolved into a conventional welfare state from the basis that had been already laid in the 1880s by Bismarck. According to Alfred Mierzejewski the generally accepted view is that Germany has a social market economy, that the post-war German economy has evolved since 1948, but the fundamental characteristics of that economic system have not changed, while in his opinion the social market economy had begun to fade in 1957, disappearing entirely by the late 1960s.
In July 1948, a group of southwest German businessmen attacked the restrictive credit policy of Erhard as Economic Director. While Erhard had designed this policy to assure currency stability and stimulate the economy via consumption, business feared the scarcity of investment capital would retard economic recovery. Erhard was also deeply critical of a bureaucratic-institutional integration of Europe on the model of the European Coal and Steel Community.
Erhard decided, as economic director for the British and American occupation zones, to lift many price controls in 1948, despite opposition from both the social democratic opposition and Allied authorities. Erhard's financial and economic policies soon proved widely popular as the German economy made a miracle recovery to rapid growth and widespread prosperity in the 1950s, overcoming wartime destruction and successfully integrating millions of refugees from the east.
After the resignation of Adenauer in 1963, Erhard was elected chancellor with 279 against 180 votes in the Bundestag on 16 October. In 1965, he was re-elected. In 1966 he also followed Adenauer as party leader, despite the fact that he had joined the Christian Democatic Union only shortly before his election to Chairman. The reasons for Erhard's reluctance are unknown, but it is probable that they stemmed from Erhard's general scepticism about party politics. However, Erhard was regarded and treated as a long-time CDU member and as the party chairman by almost everyone in Germany at the time, including the vast majority of the CDU itself.
Domestically, a number of progressive reforms were carried out during Erhard's time as chancellor. In the field of social security, Housing Benefit was introduced in 1965, while federally funded child allowances for two or more children were introduced a year earlier.
Erhard considered using money to bring about the reunification of Germany. Despite Washington's reluctance, Erhard envisaged offering Nikita Khrushchev, the leader in Moscow, massive economic aid in exchange for more political liberty in East Germany and eventually for reunification. Erhard believed that if West Germany were to offer a "loan" worth $25 billion US to the Soviet Union (which Erhard did not expect to be repaid), then the Soviet Union would permit German reunification. The acting American Secretary of State George Wildman Ball described Erhard's plan to essentially buy East Germany from the Soviet Union as "half-baked and unrealistic." Erhard's objective corresponded in time with Khrushchev rethinking his relations to West Germany. The Soviet leader secretly encouraged Erhard to present a realistic proposal for a 'modus vivendi' and officially accepted the chancellor's invitation to visit Bonn. However, Khrushchev fell from power in October 1964, and nothing developed. Perhaps more importantly, by late 1964, the Soviet Union had received a vast series of loans from the international money markets, and no longer felt the need for Erhard's money.
Erhard believed the major world problems were solvable through free trade and the economic unity of Europe (as a prerequisite for political unification); he alienated French president Charles de Gaulle, who wanted the opposite. Support for the American role in the Vietnam War proved fatal for Erhard's coalition. Through his endorsement of the American goal of military victory in Vietnam, Erhard sought closer collaboration with Washington and less with Paris. Erhard's policy complicated Allied initiatives toward German unification, a dilemma that the United States placed on the back burner as it focused on Southeast Asia. Erhard failed to understand that American global interests—not Europe's needs—dictated policy in Washington, D.C., and he rejected Adenauer's policy of fostering good relations with both the United States and France in the pursuit of West German national interest. Faced with a dangerous budget deficit in the 1966–1967 recession, Erhard fell from office in part because of concessions that he made during a visit to U.S. President Lyndon B. Johnson.
In 1961, while vice president, Johnson had hosted Konrad Adenauer some two years before the German statesman vacated the chancellorship of the German Federal Republic. In December 1963, less than a month after he had assumed the American presidency upon the assassination of John F. Kennedy, Johnson staged the first ever presidential barbecue in Erhard's honor. The event was held in and about the Stonewall Elementary School gymnasium in Stonewall in the Texas Hill Country. Among the entertainers was the internationally known concert pianist Van Cliburn, who appeared in a business suit, rather than his usual formal wear. As a member of the Texas House of Representatives, Samuel Ealy Johnson, Jr., Johnson's father, been sensitive to his German-American constituency and had opposed the Creel Committee's attempt to disparage German culture and isolate German-Americans during World War I. Adenauer and Erhard had also stayed at Johnson's ranch in Gillespie County.
Erhard's fall suggested that progress on German unification required a broader approach and a more active foreign policy. Chancellor Willy Brandt in the late 1960s abandoned the Hallstein Doctrine of previous chancellors and employed a new "Ostpolitik," seeking improved relations with the Soviet Union and Eastern Europe and thereby laying the groundwork for détente and coexistence between East and West. In the 1980s Chancellor Helmut Kohl, however, reverted to Erhard's approach in collaborating with the Reagan administration in its hard-line anti-Soviet policy.
On 26 October 1966, Minister Walter Scheel (FDP) resigned, protesting against the budget released the day before. The other ministers who were members of the FDP followed his example — the coalition was broken. On 1 December, Erhard resigned. His successor was Kurt Georg Kiesinger (CDU), who formed a grand coalition with the SPD.
Erhard continued his political work by remaining a member of the West German parliament until his death in Bonn from heart failure on 5 May 1977. He was buried in Gmund, near the Tegernsee. The Ludwig Erhard-Berufsschule (professional college) in Paderborn, Fürth and Münster are named in his honour.
The term of Erhard's first ministry was from 16 October 1963 to 26 October 1965.
Following his re-election on 26 October 1965, Erhard's second ministry ran until his resignation on 1 December 1966.
| Minister for Economics
| Vice Chancellor of West Germany
| Chancellor of West Germany
Kurt Georg Kiesinger
Events in the year 1963 in Germany.1965 West German federal election
Federal elections were held in West Germany on 19 September 1965 to elect the members of the 5th Bundestag. The CDU/CSU remained the largest faction, while the Social Democratic Party remained the largest single party in the Bundestag, winning 251 of the 518 seats (including 15 of the 22 non-voting delegates for West Berlin).2009 German federal election
Federal elections took place on 27 September 2009 to elect the members of the 17th Bundestag (parliament) of Germany. Preliminary results showed that the Christian Democratic Union (CDU), its Bavarian sister party, the Christian Social Union (CSU), and the Free Democratic Party (FDP) won the election, and the three parties announced their intention to form a new centre-right government with Angela Merkel as Chancellor. Their main opponent, Frank-Walter Steinmeier's Social Democratic Party (SPD), conceded defeat. The Christian Democrats previously governed in coalition with the FDP in most of the 1949–1966 governments of Konrad Adenauer and Ludwig Erhard and the 1982–1998 governments of Helmut Kohl.Börse Berlin
Börse Berlin AG (or Berlin Stock Exchange) is a stock exchange based in Berlin, Germany, founded in 1685 through an edict of Great Elector Friedrich Wilhelm and is one of the oldest exchanges in Germany. In order to address internationalisation and growing consolidation pressure, Börse Berlin has pursued a successful niche strategy since the mid-nineties, with a particular focus on trading the widest possible range of foreign stocks. With the advent of MiFID (Markets in Financial Instruments Directive), the exchange has decided to realign itself completely with its new market segment Equiduct Trading, the exchange will be truly pan-European. Equiduct Trading will allow Börse Berlin to expand its service offering, which until recently was primarily addressing retail investors, by offering custom made solutions for professional market participants.
Through the acquisition of a majority stake in EASDAQ NV, the sole owner of Equiduct Systems Ltd and the ETS trading platform, Börse Berlin has gained control of and access to a state-of-the-art electronic trading system. Börse Berlin will remain headquartered in Berlin (operating under the brand "Equiduct Trading"), but has opened additional offices in London and Paris in order to underline its pan-European ambitions. Professional market participants, that make use of the Equiduct Trading market model, can guarantee to their customers that their orders will receive best execution in accordance with MiFID regulations. London based Equiduct Systems, part of the Börse Berlin Equiduct Trading Group, will provide transaction services for Börse Berlin which will define the legal and regulatory framework of the Equiduct Trading segment. The Equiduct Trading segment is an integral part of the state-monitored and regulated Börse Berlin.
The Börse is housed in Ludwig-Erhard-Haus designed by Nicholas Grimshaw at Fasanenstraße 85 in Berlin-Charlottenburg.Egon Klepsch
Egon Alfred Klepsch (January 30, 1930 – September 18, 2010.) was a German politician (CDU).
In the years 1963–1969 Dr. Klepsch was Federal leader of the Junge Union. In 1965 he worked briefly as an election campaign manager for Ludwig Erhard. In the same year he was elected to the German Bundestag, to which he belonged until 1980.
Since 1964 Dr. Klepsch had been active at the European level. From 1973 he was a Member of the European Parliament in parallel to the Bundestag. After the first direct election of the parliament in 1979 Klepsch became chairman of the EPP parliamentary group. After he had stood in vain in 1982 for the office of President of the European Parliament, he was elected in 1992 with the support of the EPP and PES parliamentary groups. In 1994 he retired from the European Parliament and became an advisor to Deutschen Vermögensberatungs AG.Fifth Adenauer cabinet
The Fifth Adenauer cabinet was formed by incumbent Chancellor Konrad Adenauer shortly after the previous Adenauer IV cabinet fell apart over the Spiegel affair. The forced resignation of Defence Minister Franz Josef Strauss was required to gain back the FDP's support for the cabinet.
Adenauer's fifth cabinet was sworn in on 14 December 1962. Adenauer decided to retire just a few months later, following which Ludwig Erhard was elected as Chancellor and formed the first Erhard cabinet on 17 October 1963.Franz Oppenheimer
Franz Oppenheimer (March 30, 1864 – September 30, 1943) was a German sociologist and political economist, who published also in the area of the fundamental sociology of the state.Gerhard Stoltenberg
Gerhard Stoltenberg (September 29, 1928 – November 23, 2001) was a German politician (CDU) and minister in the cabinets of Ludwig Erhard, Kurt Georg Kiesinger and Helmut Kohl. He served as minister-president of the German state (Land) of Schleswig-Holstein from 1971 to 1982 and as such as President of the Bundesrat in 1977/78.GfK
The GfK SE (established in 1934 as Gesellschaft für Konsumforschung, "Society for Consumer Research") is Germany's largest market research institute, and the fourth largest market research organisation in the world, after Nielsen Company, Kantar Group and Ipsos. It was founded by an association of university teachers, among them Ludwig Erhard.
In April 2005 it acquired NOP World, based mostly in the United Kingdom, the United States and Italy, which was rated the ninth largest market research business in the world.
In May 2008 it acquired an equity stake in Deep-Packet Inspection company Qosmos in order to track and monitor Internet usage for marketing research.In December 2011, GfK acquired Knowledge Networks, based in Palo Alto, California the United States, which does online research for consumer products and services, pharmaceuticals, retail, media, and public policy. KN's Dimestore platform offers unique platform for measuring the effectiveness of digital ad campaign with simple surveys of streaming video ads, that also allows real-time reporting.
In 2010, the company was the fourth-largest market research company by revenue.In December 2016 the capital firm KKR announced an offer to take over the majority of GfK SE's shares.Gmund am Tegernsee
Gmund am Tegernsee is a municipality in the district of Miesbach in Bavaria in Germany. The town is located on the north shore of the Tegernsee Lake, and near the source of River Mangfall. It is 46 kilometres (29 mi) from Munich and 15 kilometres (9.3 mi) from the district capital, the town of Miesbach.
Famous personalities who lived in Gmund were the Federal Chancellor of the Federal Republic of Germany Ludwig Erhard, who is buried in Gmund's cemetery, the architect Sep Ruf and the clockmaker Johann Mannhardt. Reichsführer Heinrich Himmler and his family maintained a home there from 1934 to 1945.
Gmund is served by a station on the privately owned Tegernsee-Bahn railway, and is linked to Munich by through trains of the Bayerische Oberlandbahn.Historical rankings of Chancellors of Germany
Historical rankings of Chancellors of Germany are surveys conducted to construct rankings of the success and popularity of the individuals who have served as Chancellor of Germany in the Federal Republic of Germany.Karl Schiller
Karl August Fritz Schiller (24 April 1911 – 26 December 1994) was a German economist and politician of the Social Democratic Party (SPD). From 1966 to 1972, he was Federal Minister of Economic Affairs and from 1971 to 1972 Federal Minister of Finance. He was the inventor of the magic square, depicting Economic equilibrium, and of the Concerted activity (Konzertierte Aktion) to reflate the German market. He is thus seen as one of the most influential German economists beside Ludwig Erhard.Luise Erhard
Luise Erhard (formerly Luise Schuster; née Luise Lotter; 18 April 1893 – 9 July 1975) was a German economist and the wife of Ludwig Erhard, former Chancellor of the Federal Republic of Germany.
Luise Lotter was born in Langenzenn and later moved to Fürth; she lived in the same neighborhood as her future husband Ludwig Erhard and was friends with his sister. In 1914, she married Friedrich Schuster, a lawyer, but he was killed a year later while serving in the First World War. She encountered Erhard again while studying business management and accounting in Nuremberg in 1919, and they married in 1923. Luise had a daughter from her first marriage, Eleanore, and had a second daughter, Elizabeth, with Erhard.Although she was an accomplished economist in her own right, Luise Erhard placed her career on hold in order to support her husband's political career. Ludwig Erhard served as Chancellor from 1963 until 1966. A 1964 profile in The New York Times noted that "In matters of economics, Luise Erhard, it is said, is one of the German Chancellor's most valued counselors. ... Whatever advice she gives remains private. She prefers homemaking to public life."Nikolaus Blome
Nikolaus Blome (born September 16, 1963 in Bonn) is a German journalist and author.Social market economy
The social market economy (SOME; German: soziale Marktwirtschaft), also called Rhine capitalism, is a socioeconomic model combining a free market capitalist economic system alongside social policies that establish both fair competition within the market and a welfare state. It is sometimes classified as a coordinated market economy. The social market economy was originally promoted and implemented in West Germany by the Christian Democratic Union (CDU) under Chancellor Konrad Adenauer in 1949. Its origins can be traced to the interwar Freiburg school of economic thought.The social market economy was designed to be a third way between laissez-faire economic liberalism and socialist economics. It was strongly inspired by ordoliberalism, social democratic ideas and the political ideology of Christian democracy, or more generally the tradition of Christian ethics. The social market economy refrains from attempts to plan and guide production, the workforce, or sales, but it does support planned efforts to influence the economy through the organic means of a comprehensive economic policy coupled with flexible adaptation to market studies. Combining monetary, credit, trade, tax, customs, investment and social policies as well as other measures, this type of economic policy aims to create an economy that serves the welfare and needs of the entire population, thereby fulfilling its ultimate goal.The "social" segment is often wrongly confused with socialism and democratic socialism and although aspects were inspired by the latter the social market approach rejects the socialist ideas of replacing private property and markets with social ownership and economic planning. The "social" element to the model instead refers to support for the provision of equal opportunity and protection of those unable to enter the free market labor force because of old-age, disability, or unemployment.Some authors use the term "social capitalism" with roughly the same meaning as social market economy. It is also called "Rhine capitalism", typically when contrasting it with the Anglo-Saxon model of capitalism. Rather than see it as an antithesis, some authors describe Rhine capitalism as a successful synthesis of the Anglo-American model with social democracy. The German model is also contrasted and compared with other economic models, some of which are also described as "third ways" or regional forms of capitalism, including Tony Blair's Third Way, French dirigisme, the Dutch polder model, the Nordic model, Japanese corporate capitalism and the contemporary Chinese model. A 2012 comparative politics textbook distinguishes between the "conservative-corporatist welfare state" (arising from the German social market economy) and the "labor-led social democratic welfare state". The concept of the model has since been expanded upon into the idea of an eco-social market economy as not only taking into account the social responsibility of humanity, but also the sustainable use and protection of natural resources.Wilhelm Röpke
Wilhelm Röpke (October 10, 1899 – February 12, 1966) was Professor of Economics, first in Jena, then in Graz, Marburg, Istanbul, and finally Geneva, Switzerland, and one of the spiritual fathers of the social market economy, theorising and collaborating to organise the post-World War II economic re-awakening of the war-wrecked German economy, deploying a program sometimes referred to as the sociological neoliberalism (compared to ordoliberalism, a more sociologically inclined variant of German neoliberalism).With Alfred Müller-Armack and Alexander Rüstow (sociological neoliberalism) and Walter Eucken and Franz Böhm (ordoliberalism) he elucidated the ideas, which then were introduced formally by Germany's post-World War II Minister for Economics Ludwig Erhard, operating under Konrad Adenauer's Chancellorship. Röpke and his colleagues' economic influence therefore is considered largely responsible for enabling Germany's post-World War II "economic miracle". Röpke was also a historian and was nominated to the Nobel Prize in Literature in 1965.Wirtschaftswunder
The term Wirtschaftswunder (German: [ˈvɪʁtʃaftsˌvʊndɐ] (listen), "economic miracle"), also known as the Miracle on the Rhine, describes the rapid reconstruction and development of the economies of West Germany and Austria after World War II (adopting an ordoliberalism-based social market economy). The expression referring to this phenomenon was first used by The Times in 1950.Beginning with the replacement of the Reichsmark with the Deutsche Mark in 1948 as legal tender (the Schilling was similarly re-established in Austria), a lasting period of low inflation and rapid industrial growth was overseen by the government led by West German Chancellor Konrad Adenauer and his Minister of Economics, Ludwig Erhard, who went down in history as the "father of the German economic miracle." In Austria, efficient labor practices led to a similar period of economic growth.
The era of economic growth raised West Germany and Austria from total wartime devastation to developed nations in modern Europe. At the founding of the European Common Market in 1957 West Germany's economic growth stood in contrast to the struggling conditions at the time in the United Kingdom.
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|German Democratic Republic|
|Federal Republic of Germany|
|North German Confederation |
|German Empire |
|Weimar Republic |
|Nazi Germany |
|Federal Republic |