End of the German Miracle?

PAUL McGOULDRICK

The death of Ludwig Erhard —the former West German Chancellor who, as Minister of Economic Affairs, was the architect of the nation’s return to a free-market economy after defeat and occupation in World War II—was mourned here in Germany by members of all parties. For his passing coincided with economic difficulties which may seem small in contrast to those of Britain and Italy but have a significance all their own. That significance is the long-run impossibility of combining current levels of state transfers and expenditures with full employment and sustainable growth, even when the monetary management of the economy is very competent and other conditions seem to be near-ideal.

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About the Author

Paul McGouldrick

PAUL McGOULDRICK

The death of Ludwig Erhard —the former West German Chancellor who, as Minister of Economic Affairs, was the architect of the nation’s return to a free-market economy after defeat and occupation in World War II—was mourned here in Germany by members of all parties. For his passing coincided with economic difficulties which may seem small in contrast to those of Britain and Italy but have a significance all their own. That significance is the long-run impossibility of combining current levels of state transfers and expenditures with full employment and sustainable growth, even when the monetary management of the economy is very competent and other conditions seem to be near-ideal.