West Germany’s postwar social market economy
by John Ballantyne (News Weekly, Melbourne)
Abstract
German economists Wilhelm Röpke, Walter Eucken, Alfred Müller-Armack
and Ludwig Erhard founded the postwar Federal Republic of Germany's
highly successful “social market” model of capitalism, which was based on
promoting both free enterprise and a widespread ownership of capital and
property. The founders of this school of thought rejected both state socialism
and old-fashioned laissez-faire capitalism. Before and during the war they
had been trenchantly anti-Nazi and formed an underground intellectual
resistance group. (Röpke was forced to flee abroad in 1933 after he publicly
denounced Hitler and all his works). Their ideas, which have been sadly
neglected in the English-speaking world, differ in many respects from the
better-known Austrian and Chicago approaches to free-market economics.