Ordoliberal Leonard Miksch designed West Germany’s market-economy transition law

Evidence

During World War II, Miksch, who had received his habilitation from Eucken in 1938, published highly relevant articles on issues concerning the wartime economy in a supplement of the business section of the Frankfurter Zeitung, called Wirtschaftskurve. This periodical is known to have echoed the wartime economy concepts of the planning office at the Ministerium für Rüstung und Kriegsproduktion (Ministry of Armament and Munitions). Immediately after 1945, Miksch became one of Ludwig Erhard’s most influential advisers, initially as political consultant in the public relations department of the Verwaltung für Wirtschaft. In 1948, after having been appointed head of the Grundsatzreferat der Preisabteilung (meaning Miksch was responsible for drawing the main lines at the department for setting and controlling prices), he set up the Leitsätzegesetz, which marked the transition to a market economy in West Germany in the same way as the currency reform did. Furthermore, Miksch is considered to have invented the As-If-Theorem. According to this theorem, state authorities should fix a competition price, if market competition is insufficient or fails completely (Miksch 1948). Miksch had joined the Social Democratic Party and was one of the few Social Democrats who joined the Mont Pèlerin Society. — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 563

Categorization

• DEFINE: Defines the As-If-Theorem: authorities should set a competition price when market competition fails.
• XREF: Miksch’s wartime economics work connecting the Ordo circle to more authoritarian state planning differs sharply from Hayek’s anti-state liberalism.