A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Schiller, Karl Article — Digitized Version An optimistic look at the year 1968 Intereconomics Suggested Citation: Schiller, Karl (1968) : An optimistic look at the year 1968, Intereconomics, ISSN 0020-5346, Verlag Weltarchiv, Hamburg, Vol. 03, Iss. 1, pp. 6-8, http://dx.doi.org/10.1007/BF02930418 This Version is available at: http://hdl.handle.net/10419/137850 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. 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QUESTION: "Homogenous Eco- of all production factors. Under (for example in the public authori- nomic Policy", "Concerted Action", present and future conditions, the ties' Council for Economic Trends) "Controlled Expansion",--such are efficiency of the free market sys- and with autonomous groups (for the catch phrases that have been tem can only be guaranteed if example in the "Concerted Ac- used to describe the purpose of the Government's policy of regula- tion"). The aim of this economic the Federal Government to in- tion can be supplemented by a policy is to achieve, within the fluence the economic process in a policy of process, in the sense of framework of the market economy, different way than up to now. the global control of the total eco- stability of the price level, a high What guiding principle is German nomic aggregates. This overall employment ratio and a balance economic policy pursuing with control of economic forces and of foreign trade and payments, as these slogans? resources does not imply direct well as a continuing and adequate interventions in the economy. growth of the national economy. ANSWER :The basis of the Federal It is restricted to a systematic in- Government's economic policy is QUESTION:Do you believe that fluence on the prerequisites and and remains the market economy, the German economy has passed conditions on which individual de- for which the State must pro- the bottom of recession in 1967, cisions are based, and thus the vide aRd guarantee the organi- and that 1968 will be a year of indirect steering of the major ag- expansion? sational framework. There is no gregates of the total economic cir- better way of directing the econ- culation, such as investment, con- ANSWER: German business ac- omy. Pricing in the market and sumption, the volume of employ- tivities have improved again after competition not only ensure a high ment, etc. A workable global con- a year of recession. Markedly degree of freedom but also per- trol therefore demands close co- livelier incoming orders in industry manently enforce an optimum use operation among State authorities since the beginning of autumn business, slight stimulations in production and a clear improve- ment in the labour market are KARL SCHILLER significant pointers towards a is professor of economics and as scientist launched into politics. continuation of the period of re- The political economist, today 56 years old, who since 1945 has covery, just as they also point to been member of the Social Democratic Party, habilitated at the the growing faith which German University of Kiel in 1939. In 1946, he accepted a professor's chair businessmen have in positive further at Hamburg University and from 1948 to 1953 simultaneously was development. The improvement is Senator for Economics and Transport of this City. In 1961 Professor not yet, however, so far advanced Schiller became Senator for Economics and Credit in Berlin. He that one can speak of a secured resigned office when he was elected to the Bundestag in 1965. and lasting upswing. The new In the course of the formation of a new government in the frame- Federal Government's anti-cycli- work of a great coalition on December 1, 1966, Professor Schiller cal economic policy, and especial- was appointed Federal Minister for Economic Affairs. ly the two programmes which are designed to increase investment, the clear improvement in the over- 6 INTERECONOMICS, No. 1, 1968 all political and economic climate fiscal sector--safeguarding of the ANSWER: The systematic ad- in the Federal Republic, but also budget--or more on business ac- vantages of the added value tax in the development of business con- tivities? comparison with the old turnover ditions in other countries--all these tax consist above all in that a ANSWER: Because of the great factors combine to make me opti- new taxation non-discriminatory importance of public budget in the mistic that a return to prosperity as to competition is introduced, development of business in our will soon be reached. which affects domestic products country--its share in the appro- just as much as export goods. The QUESTION: Are the stated aims priation of the gross national prod- cumulative effect of the gross turn- of the Federal Government's me- uct is about 35 per cent--the one over tax has had one great dis- dium-term budgetary accounting-- is inextricably bound up with the advantage, in that the rate of taxa- namely annual rise in national in- other. The decisive advance which tion on sold goods and services come in real terms of around 4 we have made with the medium- was completely different according per cent, the restriction of increase ,term budgetary accounting in the to the number of previously passed of the price level to 1 per cent Federal Republic has come about stages of production. The actual p.a., and full employment--a realis- precisely because we have over- charge on any given product in tic projection or "merely" a polit- come a budgetary policy limited any particular set of circumstances ical programme? to one year and determined by could not be assessed with any day-to-day economic contingencies. degree of certainty. This led, on ANSWER: The medium-term pro- Instead of this the development of the one hand, to manifold distor- jection is the result of a careful revenues and expenditures is now tions of ~he price structure and analysis of the presumable devel- planned in advance over a period with that of competition, and on opment of the individual produc- of five years. It is an intrinsic the other, stimulated generally the tion factors in our economy up to part of the overall economic pro- concentration of enterprises. These 1971. It is, indeed, not only a jection. Clearly the actual devel- disadvantages will be removed by realistic forward appraisal of the opment of aspects of the business possible total economic develop- cycle will be carefully watched the new added value tax. ment, but a political programme as by the executive. It is the de- Of course there will be a number well. This programme envisages a clared aim of the Federal Govern- of .difficulties in the short term, fair and continual yearly growth of ment, and also a bounden duty of when we change from a tax which 4 per cent in real terms~ the re- the Law on Stability and Growth, has been in force for decades to striction of the annual price in- to adjust the budgetary activiti.es a completely different system, and crease to 1 per cent till 1971~ a of the Federation to the needs of these difficulties will not only be rapid restoration of full employ- actual cyclical development. psychological. One cannot work out ment; the balance of international in detail these developments be- trade and payments; and a more QUESTION: Will the crisis in forehand, but one must give them equitable distribution of income the public authorities' budgets, the free play of the market. I am, which will show big deficits for the and wealth. This can only be however, confident that all ad- next years, necessitate restrictive achieved as a result of individual ministrative and other difficulties measures, higher taxes, etc, which decisions made both by Govern- of adjustment will be overcome will absorb the business impulses? ment and by the autonomous without undue frictions and that groups of our economy. This calls ANSWER: The Federation's me- the introduction of this tax will for uncomfortable resolutions not dium-term budgetary accounting is have a very positive effect on the only of the Government, but balanced in receipts and ex- further development of the econ- also of the industries and the penditure up to 1971. To achieve omy. trade unions. The time of a high this, drastic reductions in expendi- The supplementary levy of 3 per selfsustained growth of the econ- ture and higher rates of taxa- cent on the income tax will bring omy hiding all our problems is tion were necessary.