THE GERMAN 'MIRACLE' Sut,—Mr. Nigel Birch, in his review of
Dr. Erhard's book on the German 'miracle,' quotes me, with some- what exaggerated scorn, as protesting against the `few mild deflationary measures' recommended (but, Mr. Birch please note, not fully implemented) in 1950 to 'right the position,' and predicting the unemployment of two million which, I felt, would be dangerous tp the political stability of Germany. Considering that the rise of Hitler was entirely due to the vast unemploy- ment I see nothing to change in my assumption. The figure of unemployment in Germany (the readers of Mr. Birch's animadversions will, I am sure, be sur- prised to learn) rose to 1,987,000 by the end of that year. I do not call this a bad guess on my part. Indeed, I could offer Mr. Birch much worse examples of my fallibility. I can only plead that my foresight is generally better than his hindsight was about the velocity of circulation of money in this country. Mr. Birch's attitude in calling a policy which leads to 1,987,000 unemployed (I admit it was fewer than two million) and advocates a l'outrance deflation in a period of rapidly rising unemployment in the US and here leads one to understand why `Nigel was depressing' (Evidence before the Porter Tribunal, p. 98, Q.3719) and to suspect that 'the little local difficulty' which disembarrassed the Government of the three Don Quixotes of deflation might have prolonged its life. I can only hope that Mr. Birch's constituents will soon be given an opportunity to express their reaction to such sentiments.—Yours faithfully,
Balliol College, Oxford
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