PLACE: Frankfurt, Germany in July 1948
- General Lucius D. Clay, military governor of the U.S. occupation zone in Germany
- Professor Ludwig Erhard, chairman of the Economic Council of the emerging West German government
SITUATION: Erhard has just abolished the rationing of food and other essentials and has removed all wage and price controls.
GENERAL CLAY: "Herr Erhard, my advisers tell me that what you have done is a terrible mistake. What do you say to that?"
PROFESSOR ERHARD: "Herr General, pay no attention to them! My own advisers tell me the same thing."
Erhard then went on to explain the advantages of a "socially responsive free-market economy."
Clay agreed with him.
[Adapted from an account in The Fourth and Richest Reich by Edwin Hartrich]