Erhard and Ordoliberalism Flashcards
What were Erhard’s economic views?
He believed in a free market with a social conscience but not in government intervention or redistribution. He believed in harnessing the power of Germany’s entrepreneurs who were free from market controls
What did Erhard do when he came to power?
He set up a radical programme where he lifted price controls, made currency reform and cut money supply. He dramatically cut taxes which lead to a boom in industrialisation whilst inflation was kept under control. He still continued to provide welfare state protection such as public housing
Negatives of Erhard’s time as chancellor of Germany.
Some people found themselves unemployed temporarily due to rapid changes. He left office with a large debt budget
How did lifting price controls help?
It allowed the market to allocate resources freely, meaning the market became more competitive and allocated resources via prices.
What did the government do with property rights and private contracts and why?
They maintained property rights and enforced private contracts so that individual freedom could be promoted and economic efficiency as a bi product.
Examples of politicians who see Erhard’s policies as a validation of their combining of market forces and the private sector with government intervention and social spending
Bill Clinton and tony Blair
Ordoliberaslism
A free market economy operating within an orderly framework of rules and disciplines. A belief in balanced budgets combined with a central bank charged with a mandate of price stability.
Liberalism in continental Europe
Right of centre
Liberalism in USA
Left of centre
