While the public of 1966 might not have viewed Erhard as a revolutionary, the public of 1948 most certainly did.
Erhard radically disassembled the notion of planned economy and the view of the individual as a submissive cog in the machinery of the macroeconomy. In the decades prior to Erhard’s ascendancy, the economic empowerment of the individual was discouraged, as Ulrich Horstmann and Stephan Werhahn write:
Nach der Beendigung des Zweiten Weltkriegs war Ludwig Erhard der entscheidende soziale Revolutionär, der den im planwirtschaftlichen Denken verhafteten Deutschen einen neuen Weg wies. Entschlossen ging er gegen den Untertanengeist vor. Er war in der Spätphase der wilhelminischen Gesellschaft des Deutschen Kaiserreichs, das 1918 endete, und vor allem im nationalsozialistischen Führerstaat (1933–1945) staatsprägend, aber auch in der sogenannten »Ostzone«, nach dem Zweiten Weltkrieg »DDR« (1949–1990). Der Einzelne war zu einem Rädchen im System verdammt. Feigheit und Duckmäusertum wurden anerzogen.
Even before Erhard became the Bundesminister für Wirtschaft in September 1949, he had been radically transforming the German economy. The near-total destruction of the nation’s physical infrastructure, combined with the equally devastated condition of the national economy, created a historical moment known as Stunde Null, a ‘zero hour’ which was a massive rebooting of the financial system.
The Nazi government was not only responsible for the deaths of millions of people, but it had subjected the German people to the injustices of high tax rates, wage controls, price controls, and government ownership of various industrial sectors. Also horrifying was the degree to which commerce and manufacturing were regulated by the Nazi regime.
In this respect, it is worth remember that ‘Nazi’ means “National Socialist.”
Erhard was ‘revolutionary’ in the sense that he did the precise opposite of the National Socialist policies.
Where the Nazis raised taxes, Ludwig Erhard lowered taxes. Where the Nazis controlled wages, Erhard gave freedom to workers and employers to negotiate wages. Where the Nazis controlled prices, Erhard gave liberty to customers and merchants to find mutually acceptable prices. Where the Nazis gave ownership of industries to the government, Erhard gave ordinary citizens a chance to buy shares of companies. Where the Nazis regulated and controlled businesses, Erhard gave them the freedom to experiment with new products and new services.
In mid-1945, Germany held the status of a third-world developing nation. Food supplies kept the population on the brink of starvation — indeed, some people did die of hunger that year. Fresh running water, functioning sanitary sewer systems, bridges, roads, telephones, etc., were very rare.
A decade later, Germany was presented to the world as a Wirtschaftswunder — an economic miracle. By the mid-1950s, Germany was a world leader in manufacturing and exporting. Germany standards of living for ordinary citizens went from the lowest in Europe to the best in Europe.
The economic recovery of Germany — radical, revolutionary, explosive, dramatic, skyrocketing — is due largely, if not exclusively, to the ideas and policies of Ludwig Erhard.