Hist 329 assignment 3 | history | City University of New York Hostos Community College


This assignment is based on chapter 12 of Prosperity Through Competition by Germany’s former Economics Minister and Chancellor/head of government Ludwig Erhard, widely regarded as one of the architects of Germany’s post-World War II economic recovery and affluence, and of the German “social market economy” that combines a dynamic capitalism with a generous welfare state. The readings for this assignment are the following:

Ludwig Erhard, “Prosperity Through Competition,” 1957, Chapter 12


Facts About Germany: the Strong Welfare State, and Dual Vocational Training, 2020



Ludwig Erhard was Economic Minister of the post-war Federal Republic of Germany from 1949 to 1963 and Chancellor of Germany 1963-1966. He used his 14-years directing German economic and state policy to re-build that country into the economic powerhouse of Europe and to create the financial basis for Germany’s broad, generous and expensive social welfare policies. Yet in Prosperity Through Competition, Chapter 12, Erhard claimed that welfare polices could only be sustained through a strong economy, that such a strong economy required individual responsibility and initiative and public policy that maintained a stable currency. Yet Erhard wrote the following statement in Prosperity, Chapter 12 outlining what he claimed were the dangers of this social security system he helped built in Europe’s richest country:

In recent times I have frequently been alarmed by the powerful call for collective security in the social sphere. Where shall we get to and how are we to maintain progress if we increasingly adopt a way of life in which no one wants any longer to assume responsibility for himself and everyone seeks security in collectivism? I have drastically described this flight from responsibility when I said that if this mania increases we shall slide into a social order under which everyone has one hand in the pocket of another. The principle would then be this: I provide for someone else and someone else provides for me.

The blindness and the intellectual inertia that are pushing us toward a welfare state can only bring disaster. This, more than any other tendency, will serve slowly but surely to kill the real human virtues — joy in assuming responsibility, love for one’s fellow being, an urge to prove oneself, and a readiness to provide for oneself — and in the end there will probably ensue not a classless but a soulless mechanical society.

To what degree does Erhard make a reasonable argument on the need for individual security in industrial societies on one hand and the potential problems and dangers of the welfare state to personal initiative, responsibility and independence on the other? Is his arguments balanced or is there a contradiction between his role in building Europe’s biggest welfare state while warning of potential dangers to a prosperous and dynamic society this system might pose if people come to expect to be taken care of by the state?  Be quite specific about the views and reasoning in support of them. 

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