The Corona crisis, climate change, the system competition with China: The 125th birthday of Ludwig Erhard, the first Federal Minister of Economics, later Federal Chancellor and father of the social market economy, falls in a year in which the economic order he conceived is being challenged in many areas .

This also became clear on Monday at a ceremony at the invitation of the Ludwig-Erhard-Haus Foundation in Erhard's hometown of Fürth, where only a few guests were able to attend due to the pandemic.

After the end of the Second World War, Erhard, who holds a doctorate in economics and was born on February 4, 1897, led Germany with courage and conviction and against much criticism on a market economy course, initiated the end of state price setting and forced management and thus created the basis for the much quoted German economic miracle.

"Prosperity for all" was Erhard's goal and also the title of his book published in 1957.

To achieve this, the man with the cigar relied on economic freedom and the efficiency of the market and competition, combined with social equality.

Erhard's ideas are still "highly modern" today, said the Bavarian Prime Minister Markus Söder in a virtual greeting.

“Get competition back”

So how can one react to the current challenges in the spirit of Erhard?

After a crisis like the current one, it is difficult for politicians to get out of the donor mode, said Otmar Issing, who knew Erhard personally and is now President of the Center for Financial Studies in Frankfurt.

But now moderate changes must be made and competition must be promoted again.

Otherwise there is a risk that the state will believe that it can do everything better and will turn climate protection into a "costly undertaking".

The economist and former chairman of the German Council of Economic Experts, Lars Feld, also warned: "We are not managing climate protection by paying the steel industry as many subsidies as possible, but by relying on the CO2 price, international agreements and a certain social balance."

Heike Göbel, moderator of the panel discussion and responsible editor for economic policy at the FAZ, also wanted to know from the participants whether Germany with its free market economy can continue to hold its own against China's industrial policy.

In the spirit of Erhard, the answers were quite optimistic.

China is currently playing the strong man, but is also destroying the foundations of its long-term success, said former ECB chief economist Issing.

No innovations could arise in such a system.

"Democracy and the market economy will triumph over time." The CDU Vice-Chairman Carsten Linnemann put it this way: "We don't have to become more Chinese in Germany, but more competitive."