Monday, July 18, 2011

Galbraith/Not Galbraith: Economics for the Living

This is only historical fact, like the post on Hoover. Some won't like it anyway.

In the aftermath of World War II, a defeated and devastated Germany was under American occupation, controlled by Keynesian economists including the American price-control czar himself, John Kenneth Galbraith. The American overseers, as well as Germany’s new Social Democratic Party, favored maintaining the Nazi’s top-down, government-directed economy with its price and wage controls and restrictive regulations, which, unsurprisingly, created economic stagnation and crippling shortages of basic goods.

One bold German economist who understood the power of freedom dared to disagree. In a swift and masterful move on June 20, 1948 — a Sunday — economic director Ludwig Erhard freed the German market (and the people) by abolishing most of the restrictive price controls and other burdensome governmental regulations while he simultaneously solidified monetary policy with the introduction of the deutsche mark. The American Keynesians and German socialists were aghast but Erhard was quickly proven right.

Germany’s economy responded with a roar heard round the world. Within weeks, businesses sparked back to life and crippling shortages were eliminated. Within a year, the war-torn western zones united to become West Germany which quickly and overwhelmingly outpaced the Soviet-controlled East Germany. Within a decade, West Germany’s economy doubled, leaving behind Allied “winners” of the war, France and England, despite the Marshall Plan largesse these nations enjoyed. --WashTimes quoted at MoonBattery


neomom said...

The liberal and Keynes disciples write the textbooks...

J. Strupp said...

There's something comical about you knocking liberal textbooks and Keynes disciples while agreeing with a guy who's only credentials are that he's the President's cousin.

That about sums up the times we live in I guess.

Dad29 said...

The agreement is with the German who freed his country from the shackles of slavish Keynesians.

IOW, the proof is in the pudding.