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A New Chapter in Economic Policy (March 21, 1962)

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And on the other hand, employers were no less contradictory when they predicted negative consequences for exports but were still prepared – also against their better judgment – to allow production costs to rise, with the attendant rise in prices. In fact, the appreciation of the Deutschmark in 1961 through the reduction of import costs by exactly 4.8 percent served to halt inflation pressure in the domestic market. Otherwise, the collective bargaining partners’ lack of restraint would have meant far greater disadvantages for the consumer.

[ . . . ]

So what do I want? I would like to be sure that the German people will not, once again, become a tragic example of the old saying: “He who does not listen must feel the consequences.” The German nation doesn’t only consist of unions and management. And it is contrary to the nature of a democratic, parliamentary order to make collective bargaining partners responsible for the stability of the currency, that is, for the maintenance of the value of money, which ultimately means that they are responsible for society and the social order as well as the economic fate of a people. Because the collective bargaining powers will be all too willing to blame the effects of their behavior on the government, attributing the failure and assigning the blame to it. But one cannot fault the government for trying to control unbridled freedom – as is the case in all other European countries as well – by educating the public and trying to foster an objective debate in the negotiations.

[ . . . ]

My dear listeners, let me conclude with a positive and conciliatory word: In delivering this speech, it was not my intention to sharpen differences or raise a sociopolitical indictment against anyone. But precisely because of my deep sense of duty and responsibility toward the German people, I hope that, regardless of group, class, and social strata, you can recognize how important it is for me to speak directly, in what I believe is a decisive hour, to each and every one of my fellow citizens, even to shake you up in order to make clear that no membership – whether to a party or an organization or anything else – can free you of your personal responsibility and conscience.

Source: “Maßhalten! Rundfunkansprache, 21. März 1962”; [“Moderation! Radio Speech, March 21, 1962”]; reprinted in Karl Hohmann, ed., Ludwig Erhard. Gedanken aus fünf Jahrzehnten. Reden und Schriften [Ludwig Erhard. Thoughts from Five Decades. Speeches and Writings]. Düsseldorf et al., 1988, pp. 729-37.

Translation: Allison Brown

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