ABSTRACT
The remarkable performance of West Germany's economy since the 1948 Currency Reform is well known. In terms of growth without inflation, the country's record has been one of the best in the non-Communist world. The guiding concept which the framers of German economic policy claim to have followed since 1948 is that of the social market economy. The Currency Reform was accompanied by some tax reductions and concessions, and the removal of some controls. Open markets are a constituent principle of the competitive order that is second only to monetary stability in order of neo-liberal priority. Apart from price stability and open markets, Eucken had called for the enforcement of complete productive competition through the banning of restrictive business practices; the establishment of a monopoly office designed to bring the holders of economic power into a relationship. This chapter looks at some of the ways in which Dr Erhard and his colleagues implemented the idea of the social market economy.
