Where did the antitrust laws come from?

Ludwig Erhard's position on antitrust legislation and the law against restraint of competition

Table of Contents

1 Introduction

2 The principles of the social market economy and Ludwig Erhard's position on antitrust legislation
2.1 On the origin and nature of the social market economy
2.2 The basic principles of the social market economy
2.2.1 The social market economy as a value-binding system
2.2.2 The principle of competition
2.2.3 The social principles
2.3 Cartels as "enemies of the consumer" at Ludwig Erhard

3 The Law against Restraint of Competition
3.1 On the origin and essence of the term cartel
3.2 For the preparation and development of the GWB and its goals
3.3 On procedural law in the GWB

4 conclusion

5 Bibliography

1 Introduction

The following work deals with the conception of the social market economy, the implementation of which in the Federal Republic of Germany is inextricably linked with the name Ludwig Erhard and is intended to highlight the experiences that pointed the way for the German antitrust law that came into force on January 1st, 1958, the law against restraint of competition (GWB).

After a brief look at the origin of the social market economy, which is to be found in ordoliberalism and in its concrete term with Alfred Müller-Armack, and after a look at its basic principles, Ludwig Erhard's position on cartel formation and monopolies in the FRG is based on this highlighted and examined how it comes in Erhard's economic conception that cartels are seen as "enemies of the consumer".

The last section of the thesis then deals with the GWB. It begins with the historical origin of the word "cartel" and its changing associations to create a basis for discussion. For the creation of the GWB, events and experiences were important that pointed the way for later German antitrust legislation. Part of the thesis therefore deals with a summary of the most important events that go back to the end of the 19th century.

The aim of the work is to show how Ludwig Erhard's anti-cartel stance crystallized before his book “Prosperity for All” and to show the experiences of the German antitrust law, the GWB, as well as what its tasks and goals are.

2 The principles of the social market economy and Ludwig Erhard's position on antitrust legislation

A look at the origin and the principles of the social market economy turns out to be useful, as they point the way for Ludwig Erhard's anti-cartel stance . Thus they precede the chapter that elaborates on Erhard's position on cartels.

2.1 On the origin and nature of the social market economy

The origin of the concept of the social market economy can be found in Alfred Müller-Armack's 1946 work “Economic Control and Market Economy”. Müller-Armack developed his conception of a socially shaped market economy as a direct response to the problems and constraints that emerged from the war, interwar and post-war periods. However, the origins of this conception can already be identified at the time of the German Empire.[1]

The focus of this conception is the search for ways out of the conflicting areas of laissez-faire-liberalism, socialist and fascist collectivism and interventionalist state power.

In addition to Müller-Armack as the specific creator of the concept of the social market economy, there are other pioneers of this, all of whom have personal experience with the cartel economy in the German Empire, with the case-by-case economic policy of the Weimar Republic and the command and loot economy in the Third Reich and the Soviet Central Administrative Economy. As representatives of ordoliberalism - excerpts - there are to be mentioned Walter Eucken, Franz Böhm and Hans Großmann-Doerth as representatives of the Freiburg School, to which Ludwig Erhard can also be counted, as well as, in a broader sense, Wilhelm Röpke and Alexander Rustow, who belong to the social-humanist tradition can be, Friedrich A von Hayek and others. The aforementioned economists, philosophers and social scientists developed their divergent conceptions on the basis of the experiences described above, united in the idea that the restoration of individual freedom and recourse to the humane principles of the Enlightenment and liberal values ​​as a starting point for the reorganization of society and economy are necessary. They called themselves neoliberals because they tied to the principles of liberalism, but at the same time recognized its grievances and deficits and tried to overcome them by means of a new concept.[2]

The implementation of this economic order is inextricably linked with the name Ludwig Erhard, who saw in it an answer to the weaknesses of the laissez-faire market economy and defines that a market economy can only be called social if it “promotes economic progress, higher productivity and the increasing productivity will benefit the consumer "[3]. In this way, Erhard designed the economic policy model that shaped German economic policy after 1948.[4]

With regard to the current use of the term associated with German economic policy, it can be said that the social market economy takes up the demands of the ordoliberalism of the Freiburg School for a functioning competitive order and supplements these demands of an economic-political nature with emphasis on socio-political goals.[5]

The conception described above, which originated in the 1940s, was adopted as its official economic program in the CDU's federal election campaign in 1949. In summary, it can be said that the new conception of a socially controlled market economy based on the idea of ​​competition should provide an answer to questions and problems of the German development problem.[6]

2.2 The basic principles of the social market economy

With regard to his stance on cartels, Ludwig Erhards uses considerations that underlie the social market economy. Therefore, a brief overview of these basic principles of the social market economy is given below.

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[1] von Prollius, Michael: Deutsche Wirtschaftsgeschichte nach 1945, Göttingen 2006, p.50 (in the following cited as: von Prollius, Deutsche Wirtschaftsgeschichte).

[2] von Prollius, Deutsche Wirtschaftsgeschichte, pp. 50-58. Starbatty, Joachim: Social market economy as a research topic. A literature report, in: Social market economy as a historical setting of the course. A commemorative publication for the hundredth birthday of Ludwig Erhard, ed. from the Ludwig-Erhard-Stiftung e.V., Bonn 1996, pp. 64-68.

[3] Erhard, Ludwig: Prosperity for all, Düsseldorf 1957, p.164 (in the following cited as: Erhard, prosperity).

[4] Pätzold, Social MW, p.11.

[5] Art. Social market economy, Gablers p. 2694

[6] Abelshauser, Werner: Economic history of the Federal Republic of Germany 1945-1980, Frankfurt a. M. 1983, p. 71 (cited below as: Abelshauser, Wirtschaftsgeschichte).

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