Erhard, Ludwig

Erhard, Ludwig (b. 4 Feb. 1897, d. 5 May 1977). West German Economics Minister 1949–63; Chancellor 1963–6 A professor of economics and economic adviser to the US administration in Germany from 1945, he is generally remembered as the ‘father of the German economic miracle’. He realized a social market economy (a capitalist economy in which the state had a strong role in the provision of social welfare and market regulation) against considerable opposition, first as the economics director of the English and American-controlled zones of Germany from March 1948, and then as West German Economics Minister. Against the wishes of the Allies, Erhard successfully abolished food rations. His ‘ordo-liberal’ policies aimed at creating a stable market economy, as well as strong institutions to guard against the abuse of market power. Through his successful economic policies, which facilitated an average economic growth rate of 8 per cent per annum and ensured rapidly rising living conditions, he made a major contribution to the success of the fragile West German political system. In 1963 he succeeded Adenauer as Chancellor. Erhard's foreign policy was less focused on France and more directed towards the USA. In domestic politics, Erhard found it difficult to establish his authority, with Adenauer constantly sniping at him from the background. Ironically, it was the economic crisis of the mid-1960s, as well as growing disagreements with his junior coalition partner, the Liberal Party (FDP), which led to his resignation in 1966.