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How to Make a Miracle? Ludwig Erhard’s Post-War Price Liberalisation in China’s 1980s Reform Debate

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  • Isabella M. Weber

    (Goldsmiths, University of London)

Abstract

This paper develops a comparative and connected history of the debates over transition to a market economy in West-Germany after World War II and in China during the first decade of reform and opening up under Deng Xiaoping (1978-1988). At both historical moments the political aim was to reintroduce market mechanisms into a dysfunctional command economy. The question what kind of price reform this required was subject to heated debates among economists. This paper shows how the West-German 1948 currency and price reform was introduced into the Chinese reform debate by German ordoliberals and neoliberals like Friedman. It traces how the West-German case study was mystified as “Erhard Miracle” and became a metaphor for the shock therapy of universal overnight price liberalisation in China.

Suggested Citation

  • Isabella M. Weber, 2019. "How to Make a Miracle? Ludwig Erhard’s Post-War Price Liberalisation in China’s 1980s Reform Debate," Working Papers 1903, New School for Social Research, Department of Economics.
    • Handle: RePEc:new:wpaper:1903
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    References listed on IDEAS

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    1. Nicholls, A. J., 2000. "Freedom with Responsibility: The Social Market Economy in Germany 1918-1963," OUP Catalogue, Oxford University Press, number 9780198208525.
    2. Liu Guoguang, 1987. "Economic Reform and Macroeconomic Management: Commentaries on the International Conference on Macroeconomic Management," Chinese Economy, Taylor & Francis Journals, vol. 20(3), pages 3-45, April.
    3. Naughton, Barry, editor, 2013. "Wu Jinglian: Voice of Reform in China," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262019434, December.
    4. Roger E. Backhouse, 2005. "The Rise of Free Market Economics: Economists and the Role of the State since 1970," History of Political Economy, Duke University Press, vol. 37(5), pages 355-392, Supplemen.
    5. Stephan Puehringer, 2016. "Think Tank networks of German neoliberalism. Power structures in economics and economic policies in post-war Germany," ICAE Working Papers 53, Johannes Kepler University, Institute for Comprehensive Analysis of the Economy.
    6. James L. Y. Chang, 1987. "History of Chinese Economic Thought: Overview and Recent Works," History of Political Economy, Duke University Press, vol. 19(3), pages 481-502, Fall.
    7. repec:ucp:bkecon:9780226264141 is not listed on IDEAS
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    More about this item

    Keywords

    Ordoliberalism; price reform; socialism; China; market transition; Ludwig Erhard;
    All these keywords.

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