The Stay-at-Home

For weeks hard-driving Ludwig Erhard, West Germany's portly, pink-faced Minister of Economics, had been looking forward to the day when he would fly off to New York to lecture at Columbia University. Almost alone among the men who govern Western Europe Erhard openly doubted the economic wisdom of the proposed European Common Market ("There is no economic sense in creating an island of protection in Europe"). The New York visit, he figured, would give him a fine chance to disabuse Americans of what he considered their excessive enthusiasm for the project.

Last week, just two days before he was scheduled to leave for the U.S., Erhard's dream castle came tumbling down. First came a peremptory message from Chancellor Konrad Adenauer's vacation retreat at Lake Como: cancel the trip. Next day, back in his Bonn office again, Adenauer called Erhard in for a face-to-face wigging. "I do not want anyone going over to the U.S., saying that the Common Market is disadvantageous," said Konrad Adenauer, and particularly in the week when ministers of the six nations would gather in Italy to sign the documents.

The Chancellor added that he expected Erhard's unqualified support (which he got) in the Bundestag debate. "Whatever economic objections that might be raised," said Erhard, who had done little but raise them, "it is a case where the primacy of politics must apply."

The Common Market debate was only one of testy old Konrad Adenauer's reasons for keeping Erhard at home. This is election year in West Germany, and two weeks ago the nation's bakers handed the opposition Socialist Party a made-to-order issue by jumping the price of bread. Last week, as the soap and furniture makers followed the bakers' lead, the Socialists talked ominously of spreading inflation and accused Erhard of "quietly leaving the consumer to his fate."

The Mark Gap. Despite popular uneasiness about rising prices, the fact is that most of Europe envies the German consumer's lot. Last year West Germany produced more automobiles than any country save the U.S., more steel than anyone save the U.S. and Russia. Exports are soaring; gold and foreign-exchange holdings have grown so large ($4.4 billion) that in order to keep the "Deutsche mark gap" from becoming as serious a problem as the dollar gap, the West German government is thinking of doling out foreign aid, just as the U.S. does.

The tireless energy and ability of the German people made this remarkable achievement, but its course was set by cigar-chomping Ludwig Erhard, 60. A Bavarian peasant's son, Erhard rose to power after World War II when the Allies, impressed by his lack of Nazi ties, made him Economic Administrator of the U.S. and British occupation zones. When Allied officers, not so ardent as he for Marktwirtschaft (free enterprise economy), refused to let him end rationing and price control, Erhard slipped into his office one Sunday morning and issued the decree. U.S. General Lucius Clay administered a solemn reproof: "Herr Erhard, my advisers tell me this is a terrible mistake." Replied Erhard: "General Clay, pay no attention. My advisers tell me the same thing."

Dutch Uncle. Coupled with the salutary reform of German currency, Erhard's policy helped elect Adenauer. Rewarded with the Economics Ministry, Erhard has steadily slashed away at tariffs and import quotas, fought (for the most part unsuccessfully) to prevent regrouping of Germany's prewar cartels.

Recently, caught in the political crossfire, Erhard has indulged in agitated oratory which comes oddly from the lips of Europe's foremost champion of free enterprise. He has publicly warned German industry that if necessary he will use "brute force" to keep prices stable, and all last week he hustled about Bonn exhorting manufacturers' associations like a Dutch uncle. To some Germans his performance was strangely reminiscent of the spring of 1951 and a similar threat of inflation. Then, too, Erhard exhorted, talked sternly of compulsory savings programs, even appointed a price czar. Months later, when the inflationary threat had quietly disappeared, the Economics Minister grinned, took a heavy bite on his cigar and asked a visitor: "Remember all those announcements I made about controls? You know how many of them I had to put into force? None."

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