Ludwig Erhard

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Ludwig Erhard
Bundesarchiv B 145 Bild-F041449-0007, Hamburg, CDU-Bundesparteitag, Ludwig Erhard.jpg
Ludwig Erhard in 1973
Chancellor of Germany
(West Germany)
In office
17 October 1963 30 November 1966
President Heinrich Lübke
Vice Chancellor Erich Mende
Preceded by Konrad Adenauer
Succeeded by Kurt Georg Kiesinger
Leader of the Christian Democratic Union
In office
23 March 1966 23 May 1967
Bundestag Leader Rainer Barzel
Preceded by Konrad Adenauer
Succeeded by Kurt Georg Kiesinger
Vice Chancellor of Germany
(West Germany)
In office
29 October 1957 15 October 1963
Chancellor Konrad Adenauer
Preceded by Franz Blücher
Succeeded by Erich Mende
Federal Minister for Economics
In office
20 September 1949 15 October 1963
Chancellor Konrad Adenauer
Succeeded by Kurt Schmücker
Member of the Bundestag
In office
7 September 1949 5 May 1977
Personal details
Ludwig Wilhelm Erhard

(1897-02-04)4 February 1897
Fürth, Kingdom of Bavaria, German Empire
Died5 May 1977(1977-05-05) (aged 80)
Bonn, West Germany
(now Germany)
Resting place Gmund am Tegernsee
Political party Independent
Other political
Christian Democratic Union
Spouse(s) Luise Erhard
Alma mater Goethe University Frankfurt (Ph.D.)
Signature Ludwig Erhard signature.svg
Military service
AllegianceFlag of the German Empire.svg  German Empire
Branch/serviceKaiserstandarte.svg Imperial German Army
Years of service1916–1919
Rank Unteroffizier
Unit22nd Royal Bavarian Field Artillery Regiment
Battles/wars World War I

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 the West 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. [1] In his tenure as Chancellor, however, Erhard lacked support from Adenauer, and failed to win the public's confidence in his handling of a budget deficit and his direction of foreign policy. His popularity waned, and he resigned his chancellorship on 1 December 1966.

Germany Federal parliamentary republic in central-western Europe

Germany, officially the Federal Republic of Germany, is a country in Central and Western Europe, lying between the Baltic and North Seas to the north and the Alps, Lake Constance and the High Rhine to the south. It borders Denmark to the north, Poland and the Czech Republic to the east, Austria and Switzerland to the south, France to the southwest, and Luxembourg, Belgium and the Netherlands to the west.

Christian Democratic Union of Germany political party in Germany

The Christian Democratic Union of Germany is a Christian-democratic, liberal-conservative political party in Germany. It is the major catch-all party of the centre-right in German politics. The CDU forms the CDU/CSU grouping, also known as the Union, in the Bundestag with its Bavarian counterpart the Christian Social Union in Bavaria (CSU). Founded in 1945 as an interdenominational Christian party, the CDU effectively replaced the pre-war Catholic Centre Party, but also included politicians of other, liberal and conservative backgrounds. The party therefore claims to represent "Christian-social, liberal and conservative" elements.

West Germany Federal Republic of Germany in the years 1949–1990

West Germany was the informal name for the Federal Republic of Germany, a country in Central Europe, in the period between its formation on 23 May 1949 and German reunification on 3 October 1990. During this Cold War period, the western portion of Germany was part of the Western Bloc. The Federal Republic was created during the Allied occupation of Germany after World War II, established from eleven states formed in the three Allied zones of occupation held by the United States, the United Kingdom and France. Its (provisional) capital was the city of Bonn. The Cold War era West Germany is unofficially historically designated the "Bonn Republic".


Early life and career

Ludwig Erhard was born in Fürth in the Kingdom of Bavaria on 4 February 1897. [2] His father was Wilhelm Erhard (b. 1859), a Catholic middle class clothing store proprietor, while his mother Augusta was a Protestant. [3] Ludwig had two brothers and a sister, Rose, all of whom were raised as Protestants. [4] Ludwig suffered from infantile paralysis in his third year, resulting in a deformed right foot and forcing him to wear orthopedic shoes for the remainder of his life. [5]

Fürth Place in Bavaria, Germany

Fürth is a city in northern Bavaria, Germany, in the administrative division (Regierungsbezirk) of Middle Franconia. It is now contiguous with the larger city of Nuremberg, the centres of the two cities being only 7 km apart.

Kingdom of Bavaria kingdom in Central Europe between 1806–1918, from January 1871 part of the German Empire

The Kingdom of Bavaria was a German state that succeeded the former Electorate of Bavaria in 1805 and continued to exist until 1918. The Bavarian Elector Maximilian IV Joseph of the House of Wittelsbach became the first King of Bavaria in 1805 as Maximilian I Joseph. The crown would go on being held by the Wittelsbachs until the kingdom came to an end in 1918. Most of Bavaria's present-day borders were established after 1814 with the Treaty of Paris, in which Bavaria ceded Tyrol and Vorarlberg to the Austrian Empire while receiving Aschaffenburg and Würzburg. With the unification of Germany into the German Empire in 1871, the kingdom became a federal state of the new Empire and was second in size, power, and wealth only to the leading state, the Kingdom of Prussia. In 1918, Bavaria became a republic, and the kingdom was thus succeeded by the current Free State of Bavaria.

Erhard entered primary school in Fürth at the age of six in 1903 and performed poorly. [4] In 1907, he entered Fürth’s Royal Bavarian Vocational High School, where his grades were average. [5] He received his secondary school certificate in 1913. [5] He was a commercial apprentice at the Georg Eisenbach textile company in Nuremberg from 1913 to 1916. [5] After his apprenticeship he worked as a retail salesman in his father's draper's shop.

Nuremberg Place in Bavaria, Germany

Nuremberg is the second-largest city of the German federal state of Bavaria after its capital Munich, and its 511,628 (2016) inhabitants make it the 14th largest city in Germany. On the Pegnitz River and the Rhine–Main–Danube Canal, it lies in the Bavarian administrative region of Middle Franconia, and is the largest city and the unofficial capital of Franconia. Nuremberg forms a continuous conurbation with the neighbouring cities of Fürth, Erlangen and Schwabach with a total population of 787,976 (2016), while the larger Nuremberg Metropolitan Region has approximately 3.5 million inhabitants. The city lies about 170 kilometres (110 mi) north of Munich. It is the largest city in the East Franconian dialect area.

In 1916, during World War I, Erhard volunteered for the German military. [5] He was referred to the 22nd Royal Bavarian Artillery Regiment and trained as a gun aimer. [5] He first served in the quiet Vosges sector on the Western Front. [5] The regiment was then deployed to Romania on the Eastern Front, where he also saw little combat. [5] Erhard contracted typhus and was sent back to Germany. [5] He recovered and returned to his unit. [5] He was badly wounded on his left shoulder, side and leg by an Allied artillery shell on 28 September 1918 during the Fifth Battle of Ypres. [6] He was committed to a military hospital in Recklinghausen, where he underwent seven operations until June 1919. [6] His left arm became permanently shorter than his right one. [6]

World War I 1914–1918 global war originating in Europe

World War I, also known as the First World War or the Great War, was a global war originating in Europe that lasted from 28 July 1914 to 11 November 1918. Contemporaneously described as, "the war to end all wars," it led to the mobilisation of more than 70 million military personnel, including 60 million Europeans, making it one of the largest wars in history. It is also one of the deadliest conflicts in history, with an estimated nine million combatants and seven million civilian deaths as a direct result of the war, while resulting genocides and the resulting 1918 influenza pandemic caused another 50 to 100 million deaths worldwide.

Vosges Mountain range in France

The Vosges are a range of low mountains in eastern France, near its border with Germany. Together with the Palatine Forest to the north on the German side of the border, they form a single geomorphological unit and low mountain range of around 8,000 km2 (3,100 sq mi) in area. It runs in a north-northeast direction from the Burgundian Gate to the Börrstadt Basin, and forms the western boundary of the Upper Rhine Plain.

Western Front (World War I) main theatre of war during the First World War

The Western Front was the main theatre of war during the First World War. Following the outbreak of war in August 1914, the German Army opened the Western Front by invading Luxembourg and Belgium, then gaining military control of important industrial regions in France. The tide of the advance was dramatically turned with the Battle of the Marne. Following the Race to the Sea, both sides dug in along a meandering line of fortified trenches, stretching from the North Sea to the Swiss frontier with France, which changed little except during early 1917 and in 1918.

Because of his injury he could no longer work as a draper and started learning economics in late 1919 at a business college in Nuremberg. [7] He passed the school's exit examination on 22 March 1922 and received a degree in business administration. [7] During his time at school, he developed a friendship with the economist and professor Wilhelm Rieger, to whom Erhard owed much of his liberal convictions. [8] Thanks to Rieger's intervention, Erhard was able to enroll at the University of Frankfurt in fall of 1922. [8] He received his Ph.D. from the university on 12 December 1925, for a dissertation finished in the summer of 1924 under Franz Oppenheimer. [9] Oppenheimer's liberal socialist ideology had a heavy influence on Erhard, especially Oppenheimer's opposition to monopolies. [10] During his time in Frankfurt he married Luise Schuster (1893–1975), a fellow economist, on 11 December 1923. [8] They had known each other since childhood. [8]

Goethe University Frankfurt university in Frankfurt, Germany

Goethe University Frankfurt is a university located in Frankfurt, Germany. It was founded in 1914 as a citizens' university, which means it was founded and funded by the wealthy and active liberal citizenry of Frankfurt. The original name was Universität Frankfurt am Main. In 1932, the university's name was extended in honour of one of the most famous native sons of Frankfurt, the poet, philosopher and writer/dramatist Johann Wolfgang von Goethe. The university currently has around 45,000 students, distributed across four major campuses within the city.

Franz Oppenheimer

Franz Oppenheimer was a German sociologist and political economist, who published also in the area of the fundamental sociology of the state.

Luise Erhard

Luise Erhard was a German economist and the wife of Ludwig Erhard, former Chancellor of the Federal Republic of Germany.

After his graduation they moved to Fürth and he became an executive in his father's company in 1925. Erhard spent the next three years as a mostly unemployed academic. [9] His father retired in 1928. [9] The same year, thanks to the help of Rieger and Oppenheimer, Erhard became a part-time research assistant at the Institut für Wirtschaftsbeobachtung der deutschen Fertigware (Economic Observation of the German Finished Goods Industry), a marketing research institute founded by Wilhelm Rudolf Mann and de:Wilhelm Vershofen. [9] [11] [12] Later, he became deputy director of the institute.

Marketing research is "the process or set of processes that links the producers, customers, and end users to the marketer through information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process. Marketing research specifies the information required to address these issues, designs the method for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications."

Wilhelm Rudolf Mann German businessman

Wilhelm Rudolf Mann was a German factory manager for IG Farben and later with Bayer.

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. He wrote War Finances and Debt Consolidation (orig: Kriegsfinanzierung und Schuldenkonsolidierung) in 1944; 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 an economic revival during the postwar period. [13]

After the War

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 the following April 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.

Minister of Economic Affairs

Konrad Adenauer and Ludwig Erhard in 1956 Bundesarchiv B 145 Bild-F004214-0033, Konrad Adenauer und Ludwig Erhard.jpg
Konrad Adenauer and Ludwig Erhard in 1956

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 second 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. [14]

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. [15]


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. From 1966 to 1967, he also headed the Christian Democratic Union as de facto chairman, despite the fact that he was never a member of that party (which made his election to the chairmanship irregular and void de jure), as he never formally filed a membership application despite pressures from Chancellor Adenauer. 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. The fact that he was not a member was known only to a very small circle of party leaders at the time, and it did not become known to the public until the year 2007, when the silence was finally broken by Erhard's close advisor Horst Wünsche. [16]

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. [17]

Foreign policy

Ludwig Erhard in Ottawa, Ontario, Canada, 1964 Bundesarchiv B 145 Bild-F018250-0008, Kanada, Staatsbesuch Bundeskanzler Erhard.jpg
Ludwig Erhard in Ottawa, Ontario, Canada, 1964
Charles de Gaulle and Ludwig Erhard (1965) Bundesarchiv B 145 Bild-F020548-0018, Bonn, Bundeskanzler Erhard mit Charles de Gaulle.jpg
Charles de Gaulle and Ludwig Erhard (1965)

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. [18] 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." [19] Erhard's objective coincided with Khrushchev rethinking his relations with 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. [20] Perhaps more importantly, the Soviet Union had received a vast series of loans from the international money markets by late 1964, and no longer felt the need for Erhard's money. [21]

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.

Johnson and Erhard, December 1963 Bundesarchiv B 145 Bild-P111323, USA-Besuch Ludwig Erhard, Lyndon B. Johnson.jpg
Johnson and Erhard, December 1963

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. 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. [22]

Ludwig Erhard and Israeli Prime Minister Levi Eshkol, 1967 Ludwig Erhard & Levi Eshkol.jpg
Ludwig Erhard and Israeli Prime Minister Levi Eshkol, 1967

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. [23]

Resignation and retirement

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.



  1. "The Social Market Economy." Federal Ministry for Economic Affairs and Energy, Federal Republic of Germany. Retrieved 2015-09-11.
  2. Mierzejewski 2004, p. 2.
  3. Mierzejewski 2004, pp. 2–3.
  4. 1 2 Mierzejewski 2004, p. 3.
  5. 1 2 3 4 5 6 7 8 9 10 Mierzejewski 2004, p. 4.
  6. 1 2 3 Mierzejewski 2004, p. 5.
  7. 1 2 Mierzejewski 2004, p. 7.
  8. 1 2 3 4 Mierzejewski 2004, p. 8.
  9. 1 2 3 4 Mierzejewski 2004, p. 10.
  10. Mierzejewski 2004, pp. 8–9.
  11. Jonathan, Wiesen, S. (2011). Creating the Nazi marketplace: commerce and consumption in the Third Reich. Cambridge: Cambridge University Press. ISBN   0521746361. OCLC   659413098.
  12. Pleasure and power in Nazi Germany. Ross, Corey, 1969-, Swett, Pamela E., 1970-, Almeida, Fabrice d'. Houndmills, Basingstoke, Hampshire: Palgrave Macmillan. 2011. ISBN   0230271685. OCLC   692287841.CS1 maint: others (link)
  13. Mierzejewski 2004, pp. 18–26.
  14. Mierzejewski, Alfred C. (2004), "1957: Ludwig Erhard's Annus Terribilis", Essays in Economic and Business History, 22: 17–27, ISSN   0896-226X .
  15. Van Hook, James C. (2004), Rebuilding Germany: The Creation of the Social Market Economy, 1945–1957, New York: Cambridge University Press, ISBN   0-521-83362-0 .
  17. The Federal Republic of Germany: The End of an era edited by Eva Kolinsky
  18. Jan Friedmann and Axel Frohn (October 4, 2011). "A 'Half-Baked' Deal Former German Chancellor Considered Buying East Germany". Spiegel. Retrieved 2011-10-05.
  19. Jan Friedmann and Axel Frohn (October 4, 2011). "A 'Half-Baked' Deal Former German Chancellor Considered Buying East Germany". Spiegel. Retrieved 2011-10-05.
  20. Schoenborn, Benedikt (2008), "Bargaining with the Bear: Chancellor Erhard's Bid to Buy German Reunification, 1963–64", Cold War History, 8 (1): 23–53, doi:10.1080/14682740701791318 .
  21. Jan Friedmann and Axel Frohn (October 4, 2011). "A 'Half-Baked' Deal Former German Chancellor Considered Buying East Germany". Spiegel. Retrieved 2011-10-05.
  22. Matthew D. Tippens, "When Bratwurst Met BBQ: West German Chancellors in LBJ's Hill Country," West Texas Historical Association, annual meeting in Fort Worth, Texas, February 26, 2010; the paper was actually presented by Rob Weiner of Texas Tech University in Tippens' absence.
  23. Blang, Eugenie M. (2004), "A Reappraisal of Germany's Vietnam Policy, 1963–1966: Ludwig Erhard's Response to America's War in Vietnam", German Studies Review, 27 (2): 341–360, doi:10.2307/1433086, JSTOR   1433086 .

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Political offices
Preceded by
Walther Funk
Minister for Economics
Succeeded by
Kurt Schmücker
Preceded by
Franz Blücher
Vice Chancellor of West Germany
Succeeded by
Erich Mende
Preceded by
Konrad Adenauer
Chancellor of West Germany
Succeeded by
Kurt Georg Kiesinger