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Social market economy

This article is about the Western European system. For the economic system in the People's Republic of China, see Socialist market economy.

The social market economy (SOME; German: soziale Marktwirtschaft), also called Rhine capitalism and social capitalism, is a socioeconomic model combining a regulated free market capitalist economic system alongside social policies that establish both fair competition within the market and generally a welfare state. It is sometimes classified as a coordinated market economy. The social market economy was originally promoted and implemented in West Germany by the Christian Democratic Union under Chancellor Konrad Adenauer in 1949 and today it is used by Christian Democrats and Social Democrats alike. Its origins can be traced to the interwar Freiburg school of economic thought.

The social market economy was designed to be a third way between laissez-faire economic liberalism and socialist economics. It was strongly inspired by distributism and ordoliberalism, which was influenced by the political ideology of Christian democracy. The social market economy is used by ordoliberals, social liberals and modern (not Marxist) social democrats. Social market refrains from attempts to plan and guide production, the workforce, or sales, but it does support planned efforts to influence the economy through the organic means of a comprehensive economic policy coupled with flexible adaptation to market studies. Combining monetary, credit, trade, tax, customs, investment and social policies as well as other measures, this type of economic policy aims to create an economy that serves the welfare and needs of the entire population, thereby fulfilling its ultimate goal.

The "social" segment is often wrongly confused with socialism and democratic socialism. Although aspects were inspired by democratic socialism, the social market approach rejects the socialist ideas of replacing private property and markets with social ownership and economic planning. The "social" element of the model instead refers to support for the provision of equal opportunity and protection of those unable to enter the free market labor force because of old-age, disability, or unemployment.

Some authors use the term social capitalism with roughly the same meaning as social market economy. It is also called "Rhine capitalism", typically when contrasting it with the Anglo-Saxon model of capitalism. Rather than see it as an antithesis, some authors describe Rhine capitalism as a successful synthesis of the Anglo-American model with social democracy. The German model is also contrasted and compared with other economic models, some of which are also described as "third ways" or regional forms of capitalism, including Tony Blair's Third Way, French dirigisme, the Dutch polder model, the Nordic model, Japanese corporate capitalism, and the contemporary Chinese model. A 2012 comparative politics textbook distinguishes between the "conservativecorporatist welfare state" (arising from the German social market economy) and the "labor-led social democratic welfare state". The concept of the model has since been expanded upon into the idea of an eco-social market economy as not only taking into account the social responsibility of humanity, but also the sustainable use and protection of natural resources.

Countries with a social market economy include Austria, the Czech Republic, Germany, Poland and the United Kingdom.

Contents

Social market economies aims to combine free initiative and social welfare on the basis of a competitive economy. The social market economy is opposed to laissez-faire policies and to socialist economic systems and combines private enterprise with regulation and state intervention to establish fair competition, maintaining a balance between a high rate of economic growth, low inflation, low levels of unemployment, good working conditions, social welfare and public services. The term "social" was established by Adenauer to prevent further reference to Christian socialism which was used in the early party agenda Ahlener Programm in 1947.

Although the social market economy model evolved from ordoliberalism, this concept was not identical with the conception of the Freiburg School as it emphasized the state's responsibility to work actively to improve the market condition and simultaneously to pursue a social balance. In contrast to Walter Eucken, who sought an answer to the social question by establishing a functioning competitive order within a constitutional framework, Alfred Müller-Armack conceived the social market economy as a regulatory policy idea aiming to combine free enterprise with a social program that is underpinned by market economic performance. In putting social policy on par with economic policy, Müller-Armack's concept was more emphatic regarding socio-political aims than the ordoliberal economic concept. This dual principle also appeared in the name of the model. Although the adjective "social" often attracted criticism as a decorative fig leaf or conversely as a gateway for antiliberal interventionism, it meant more than simply distinguishing the concept from that of laissez-faire capitalism on the one side and of ordoliberal conceptions on the other. In drawing on Wilhelm Röpke's anthropo-sociological approach of an economic humanism leading to a Civitas Humana, Müller-Armack pursued a "Social Humanism" or "Social Irenics"—the notion "irenics" derives from the Greek word εἰρήνη (eirēnē), which means being conducive to or working toward peace, moderation or conciliation—to overcome existing differences in society. Therefore, the social market economy as an extension of neoliberal thought was not a defined economic order, but a holistic conception pursuing a complete humanistic societal order as a synthesis of seemingly conflicting objectives, namely economic freedom and social security. This socio-economic imperative actively managed by a strong state—in contrast to the ordoliberal minimal state solely safeguarding the economic order—is often labelled by the ambiguous but historical term Der Dritte Weg ("The Third Way").

The concept of the social market economy received fundamental impulses from reflection and critique of historical economic and social orders, namely Smithian laissez-faire liberalism on the one hand and Marxian socialism on the other. Furthermore, various Third Way conceptions prepared the ground for the socio-economic concept. Already in the late 19th century, the Kathedersozialisten ("Catheder Socialists") engaged in social reforms in the Verein für Socialpolitik, turning away from pure liberalism to demand a purposive state policy designed to regulate economic life and advocating a middle course between anarchic individualism, traditionalistic corporatism and bureaucratic etatism. In the early 20th century, the Frankfurt sociologist and economist Franz Oppenheimer postulated a so-called liberal socialism (i.e. socialism achieved via liberalism) as the pursuit of a societal order in which economic self-interest preserves its power and persists in free competition. This desirable order of freedom and equality was labelled by a later programmatic publication entitled Weder so – noch so. Der dritte Weg (Neither thus, nor thus. The third way).

This position was widely shared by Oppenheimer's doctoral student and friend Ludwig Erhard, though the latter displaced adjective and subject by promoting a social liberalism and never liked the expression Third Way. In his opinion, the term was tainted, reminding him too much about ideas of a mixed economy, somewhere between a market economy and central planning. He vehemently and consistently argued against the view that models were converging.

Further in contrast to Müller-Armack who emphasised the social aspect, for Erhard the social market economy was always first and foremost a market economic system. By proclaiming "the freer an economy is, the more social it is", Erhard once told Friedrich Hayek that the free market economy did not need to be made social, but that it was social in its origin. Erhard was rather inclined to Walter Eucken's ordoliberal competitive market order. Although he even considered himself an ordoliberal, Erhard based his economic conception neither on Eucken nor on Müller-Armack. In fact, his doctoral supervisor Oppenheimer and especially Röpke, like Erhard a student of Oppenheimer, was his source of inspiration. Erhard perceived Röpke's books as works of revelation and considered the economist a brother in spirit. On 17 August 1948, Erhard referred to Müller-Armack by whom he was strongly impressed most of all not as a theorist, but instead as one who wanted to transfer theory into practice and his concept of the social market economy. Soon after, at the second party congress of the Christian Democratic Union in the British zone in Recklinghausen on 28 August 1948, Erhard circumscribed the concept as a "socially committed market economy". Whereas most neoliberal economists viewed the concept not only as an economic path between the Scylla of an untamed pure laissez-faire capitalism and the Charybdis of a collectivist planned economy, but also as a holistic and democratic social order, Erhard and in particular Müller-Armack emphasised public acceptance and civic engagement as prerequisites for the success of the socio-economic model. For instance, Müller-Armack stressed that by "more socialism" he meant the social engagement for and with the people. Equally, Erhard pointed out that the principles of the social market economy could only be achieved if the public was determined to give them priority.

Important figures in the development of the concept include Eucken, Röpke, Alexander Rüstow, Franz Böhm, Oppenheimer, Erhard, Constantin von Dietze and Müller-Armack, who originally coined the term Soziale Marktwirtschaft. They share an involvement in the Anti-Nazi Opposition, whose search for a post-Nazi order for Germany is an important background for the development of this concept. Early protagonists had close contacts to the oppositional church-movement Bekennende Kirche and Dietrich Bonhoeffer and emphasized the reference of their concept to Catholic and Protestant social ethics.

Rhine capitalism

Michel Albert described a similar concept, "Rhine capitalism". He compared the so-called "neo-American model" of a capitalistic market economy introduced by the administrations of Ronald Reagan and Margaret Thatcher with what he called Rhine capitalism, present in Germany, France and in some of the Northern European economies.

While the neo-American model builds largely on the ideas of Friedrich von Hayek and Milton Friedman, Rhine capitalism according to Albert has its foundations on publicly organized social security. Albert analyzes the Rhenish model as the more equitable, efficient and less violent one. However, according to Albert complex psychological phenomena and the functioning of the press lets the American model appear more attractive and dynamic to the general public.

Social capitalism model

Social capitalism as a theory or political or philosophical stance challenges the idea that the capitalist system is inherently antagonistic to social goals or to a political economy characterized by greater economic equality. The essence of the social market economy is the view that private markets are the most effective allocation mechanism, but that output is maximized through sound state macroeconomic management of the economy. Social market economies posit that a strong social support network for the less affluent enhances capital output. By decreasing poverty and broadening prosperity to a large middle class, capital market participation is enlarged. Social market economies also posit that government regulation and even sponsorship of markets can lead to superior economic outcomes as evidenced in government sponsorship of the Internet or basic securities regulation.

Main elements

The main elements of the social market economy in Germany are the following:

  • The social market contains central elements of a free market economy such as private property, free foreign trade, exchange of goods and free formation of prices.
  • In contrast to the situation in a free market economy, the state is not passive and actively implements regulative measures. Some elements such as pension insurance, universal health care and unemployment insurance are part of the social security system. These insurances are funded by a combination of employee contributions, employer contributions and government subsidies. The social policy objectives include employment, housing and education policies as well as a socio-politically motivated balancing of the distribution of income growth. In addition, there are provisions to restrain the free market (e.g. antitrust code, laws against the abuse of market power and so on). These elements help to diminish many of the occurring problems of a free market economy.

Germany

The social market economy was born and formed in times of severe economic, but equally socio-political crises. Its conceptual architecture was set by particular historical experiences and political prerequisites: Germany's preoccupation with the social question since the late 19th century, the criticism of liberal capitalism triggered by the world economic crisis of the early 1930s and a pronounced anti-totalitarianism as well as anti-collectivism formed by the experiences of the Third Reich. These led to the eventual development of the social market economy as a viable socio-political and economic alternative between the extremes of laissez-faire capitalism and the collectivist planned economy not as a compromise, but as a combination of seemingly conflicting objectives namely greater state provision for social security and the preservation of individual freedom.

One of the major factors for the emergence of the German model of capitalism was to ameliorate the conditions of workers under capitalism and thus to stave off the threat of Karl Marx's militant socialist movement. Germany implemented the world's first welfare state and universal healthcare program in the 1880s. Chancellor Otto von Bismarck developed a program in which industry and state work closely to stimulate economic growth by giving workers greater security. To trump the militant socialists, Bismarck gave workers a corporate status in the legal and political structures of the German Empire. In March 1884, Bismarck declared:

The real grievance of the worker is the insecurity of his existence; he is not sure that he will always have work, he is not sure that he will always be healthy, and he foresees that he will one day be old and unfit to work. If he falls into poverty, even if only through a prolonged illness, he is then completely helpless, left to his own devices, and society does not currently recognize any real obligation towards him beyond the usual help for the poor, even if he has been working all the time ever so faithfully and diligently. The usual help for the poor, however, leaves a lot to be desired, especially in large cities, where it is very much worse than in the country.

Bismarck's program centered squarely on providing universal social insurance programs designed to increase productivity and focus the political attentions of the German workers on supporting Kaiser Wilhelm I. The program included universal healthcare, compulsory education, sickness insurance, accident insurance, disability insurance and a retirement pension, none of which were then in existence to any great degree anywhere else in the world.

After the collapse of the totalitarian Third Reich with its statist and corporatist economic policy, economists and academics at the University of Freiburg im Breisgau in Germany advocated a neoliberal or new liberal and socio-economic order. In this context, it is important to distinguish between the ordoliberal Freiburg School (or Freiburg School of Law and Economics) and the Freiburg Circles. Frequently, the two schools of thought were believed to be the same, although the first emerged from the latter and among the members of the Freiburg School only the founders Walter Eucken and Franz Böhm belonged to the Freiburg Circles and conversely no member of the Freiburg Circles can be attributed to the Freiburg School, which partly advocated different economic objectives. Both schools of economic thought considered that a certain form of planning was necessary for a transitional period following the war. However, whereas the pivotal members of the Freiburg Circles, Erwin von Beckerath, Adolf Lampe and Jens Jessen, favoured productive governmental intervention, i.e. an economy regulated by a relatively strong state, Eucken, Böhm and Constantin von Dietze believed in self-regulating market forces and limited indirect state interference. According to Eucken and his competitive order labelled ordoliberalism, the state must solely create a proper legal environment for the economy and maintain a healthy level of competition through measures that follow market principles. Thus, the paramount means by which economic policy can seek to improve the economy is by improving the institutional framework or "ordo".[citation needed]

In drawing on both Eucken's ordoliberal competitive order and Wilhelm Röpke's economic humanism leading to a "Civitas Humana", the ordoliberal competitive order was further developed by the Cologne School around the economist and anthropologist Alfred Müller-Armack, who therefore coined the term Soziale Marktwirtschaft ("social market economy") in a publication in December 1946. Although it evolved from ordoliberalism as a new variant of neoliberalism, this concept was not identical with the conception of the Freiburg School. In contrast to Eucken, who favoured a strictly procedural or rule-oriented liberalism in which the state solely sets the institutional framework and abstains generally from interference in the market, Müller-Armack emphasised the state's responsibility actively to improve the market condition and simultaneously to pursue a social balance. In putting social policy on a par with economic policy, Müller-Armack's concept was more emphatic regarding socio-political aims than the ordoliberal economic concept. However, the social market economy as an extension of neoliberal thought was deliberately not a defined economic order, but an adjustable holistic conception pursuing a complete humanistic societal order as a synthesis of seemingly conflicting objectives, namely economic freedom and social security. Although it is often viewed as a mélange of socio-political ideas rather than a precisely outlined theoretical order, the conception possessed an effective slogan, which facilitated its communication to both politics and the public. However, the eventual implementation required not only communication, but also political backup.[citation needed]

Müller-Armack's concept soon met with the conception of the then Chairman of the Sonderstelle Geld und Kredit (Special Bureau for Money and Credit) within the Administration for Finance, i.e. an expert commission preparing the currency reform in the then Anglo-American Bizone, Ludwig Erhard. Although Erhard was rather inclined to Eucken's ordoliberal competitive market order and even considered himself an ordoliberal, he was strongly impressed by Müller-Armack most of all not as a theorist, but instead as one who wanted to transfer theory into practice.

When Erhard succeeded Johannes Semmler as Director of the Administration for Economics in the Bizonal Economic Council on 2 March 1948, the social market economy entered the political sphere. Soon after on 21 April 1948, Erhard informed the parliament about his economic policy and introduced the concept of the social market economy. Although there was no unanimous applause, both the liberal democrats and the conservatives widely welcomed the transition to a more market-oriented economy. Thereupon, the Chairman of the Christian Democratic Union (CDU) in the British zone of occupation, Konrad Adenauer, invited Erhard to also inform the party members about his socio-economic conception at the party convention in Recklinghausen, Germany on 28 August 1948. In a visionary and stirring speech, entitled Marktwirtschaft im Streit der Meinungen ("Market Economy in Dispute"), Erhard defended his concept of the social market economy alluding to the dualism between a controlled economy and a market economy. In view of the upcoming regional and federal elections, Adenauer, who was initially sceptical about Erhard, was not only impressed by the polarising slogan, i.e. "Controlled or Market Economy", but also by the efficacy of Erhard and his programme. The foundation for a successful political alliance was laid.[citation needed]

Konrad Adenauer, a proponent of the social market economy

Chancellor Konrad Adenauer of the ruling CDU implemented a new novel economic order amalgamating the promotion of free competition with the responsibility of the social government. The Wirtschaftswunder or "economic miracle" of West Germany could not have been brought about without secure social peace in the country. Adenauer's program centered on legislation establishing co-determination in the coal and steel industry, the system of employee property formation, the equalization of burdens, the creation of subsidized housing, child benefits, the agricultural Green Plan and the dynamism of pensions. On 20 June 1948, the principles of the "social market economy" espoused by the CDU became the foundation of modern German economic policy:

The "social market economy" is the socially anchored law for the industrial economy, according to which the achievements of free and able individuals are integrated into a system that produces the highest level of economic benefit and social justice for all. This system is created by freedom and responsibility, which find expression in the "social market economy" through genuine performance-based competition and the independent control of monopolies. Genuine performance-based competition exists when the rules of competition ensure that, under conditions of fair competition and equal opportunity, the better performance is rewarded. Market-driven prices regulate the interaction between all market participants.

After the Christian Social Union (CSU) also expressed its commitment to a market economy with social balance and the then newly elected Bavarian Minister for Economic Affairs Hanns Seidel advocated Erhard's liberal and social economic model at the CSU's party convention in Straubing in May 1949, the economic principles elaborated by the Working Committee of the CDU/CSU as liaison body and information centre of the two political parties commonly referred to as the "Union", centred the social market economy. Finally, these principles were adopted as party platform and manifesto for the upcoming federal elections at the CDU's party conference in Düsseldorf on 15 July 1949. In contrast to the previous ideological Ahlener Programm suggesting a rather abstract and anti-materialist Gemeinwirtschaft, these so-called Düsseldorfer Leitsätze not only provided a concrete, pragmatic and materialist economic programme, but also an attractive slogan to reach consensus within the party and the public. While eventually the union of the two recently established political parties (i.e. the CDU and the CSU) possessed a coherent and unifying economic programme enabling a more consistent public front, the oldest German political party, the Social Democratic Party (SPD), led by the advocate of economic planning and extensive socialisation Kurt Schumacher, did not introduce its own economic concept. This not only complicated the parliamentary work of the party in the Economic Council, but also limited the public relations of the party as a whole especially in times of campaigning where the partially complex political programmes were simplified and popularised.[citation needed]

In the run-up to the federal elections in August 1949, the CDU/CSU consequently aligned their party platforms, policies and manifestos and campaigned with the social market economy. In particular, the former advertising manager for consumer goods Ludwig Erhard, who affirmed that he would "go into the upcoming political party clashes with particular energy for the CDU", realised the potential of subtle and systematic marketing to transform the concept from an economic theory, or even abstract economic policy, into the basis of a political party's propaganda and public image that held broad appeal. Eventually, on Sunday 14 August 1949 around 31 million Germans were called to cast a vote for the first German Bundestag and to decide between the social market economy and a controlled economy advocated by the SPD. Of those eligible to vote, 25 million or 78.5 per cent actually went to the ballot boxes and showed a clear commitment to the emerging post-war democracy.[citation needed]

Although the SPD turned out to be the most successful single party by gaining 29.12 per cent of the votes, the CDU/CSU combined attracted more votes, totalling 31 per cent and 139 mandates compared to 131 for the SPD. However, in fact both Volksparteien had suffered large percentage losses over their previous Land election totals by failing to capture a comparable share of the enlarged electorate. The most remarkable advance by winning over a million extra votes and achieving 11.9 per cent of the total votes was that made by the liberal Free Democratic Party (FDP) led by the chairman Theodor Heuss. The economically liberal FDP were in fact the only political party consistently gaining percentage of votes between 1946 and 1949. While these results affirmed the then general pro-market trend in public opinion, eventually, the electorate made its decision contingent on the satisfaction of its practical needs rather than on any particular theoretical economic system. The advantage of the CDU and the CSU lay precisely in the fact that they were quasi-governing across the Bizone and thus increasingly identified with the economic recovery and the improving economic conditions. Although the implementation of the social market economy benefited also from other crucial factors, including the East-West conflict and a favourable political and social climate within Germany and abroad, the stabilising alliance between the conservative and liberal parties, the pro-market composition of the Economic Council and even the Federal Republic's own Grundgesetz (Basic Law), which stressed individual freedom, human dignity and the subsidiarity of societal organisation, it was also the consistent efforts at political communication of the cooperative and corporate model that led to the implementation and eventual electoral validation of the social market economy in post-war West Germany.

At first controversial, the model became increasingly popular in West Germany and Austria since in both states economic success (Wirtschaftswunder) was identified with it. From the 1960s, the social market economy was the main economic model in mainland Western Europe, pursued by administrations of both the centre-right (led by the CDU/CSU) and the centre-left (led by the SPD). The concept of the social market economy is still the common economic basis of most political parties in Germany and a commitment to some form of social market economy is present in Article 3 of the Treaty on European Union.[citation needed]

United Kingdom

In the United Kingdom, the concept of the social market economy was first introduced by the Conservative politician Keith Joseph. Following World War II, the main political parties agreed on the nationalization of industry and close economic regulation. In the 1970s, Joseph introduced the idea as an alternative to the post-war consensus allowing free markets for competition and innovation whilst the role of government was to help hold the ring, provide infrastructure, maintain a stable currency, a framework of laws, implementation of law and order, provision of a safety net (welfare state), defence of property rights and all other rights involved in the economic process. Throughout his political career, Joseph used his position to restate the principles of the social market economy and re-direct Conservative policy in Britain. Joseph eventually set up a think tank in 1974 to study the model and initially called it the Ludwig Erhard Foundation and Institute for a Social Market Economy before settling on the name Centre for Policy Studies.

Although one of the main factors for the emergence of the European model of capitalism was to attempt to ameliorate the conditions of workers under capitalism and thus stave off the emergence of socialism or socialist revolution, critics identify the social market model with the notions of the welfare state and sometimes mistakenly identify it as being socialistic.

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  47. Erhard, L., Marktwirtschaft im Streit der Meinungen, printed in: Erhard, L., Deutsche Wirtschaftspolitik – Der Weg der Sozialen Marktwirtschaft, Düsseldorf/ Vienna/ New York/ Moscow, 1992, p. 70. Finally, Erhard used and described the term in an article in the Berliner Tagesspiegel on 23 April 1949.
  48. Müller-Armack, A., The Social Market Economy as an Economic and Social Order, in: Review of Social Economy 36, Washington, D.C., 1978, pp. 326 f.
  49. Müller-Armack, A., Religion und Wirtschaft, Bern/ Stuttgart, 1950, pp. 559 ff.
  50. Erhard, L., Wohlstand für alle, Gütersloh, 1963, p. 11.
  51. Friedrich, Carl J. (1955). "The Political Thought of Neo-Liberalism". American Political Science Review. American Political Science Association. 49 (2): 509–525. doi:10.2307/1951819. JSTOR 1951819.
  52. Christine Blumenthal-Lampe: Das wirtschaftspolitische Programm der Freiburger Kreise: Entwurf einer freiheitlich-sozialen Nachkriegswirtschaft, Berlin 1973; Harald Jung: Soziale Marktwirtschaft und weltliche Ordnung, Berlin 2009.
  53. Michel Albert. Capitalism Against Capitalism. Whurr; 1993. ISBN 978-1-870332-54-5.
  54. Roman Herzog Institute: Social Market Economy in Germany Archived 2011-02-24 at the Wayback Machine (german)
  55. keyword "social market economy" = “Soziale Marktwirtschaft” Duden Wirtschaft von A bis Z. Grundlagenwissen für Schule und Studium, Beruf und Alltag. 2. Aufl. Mannheim: Bibliographisches Institut & F.A. Brockhaus 2004. Lizenzausgabe Bonn: Bundeszentrale für politische Bildung 2004.
  56. Gabler Wirtschaftslexikon: Eintrag: keyword "social market economy" = Soziale Marktwirtschaft
  57. Glossner, C. L.; Gregosz, D., The Formation and Implementation of the Social Market Economy by Alfred Müller-Armack and Ludwig Erhard, Sankt Augustin/Berlin, 2011, S. 32.
  58. E. P. Hennock. "Social Policy under the Empire: Myths and Evidence" German History 1998 16(1): 58–74; Herman Beck, The Origins of the Authoritarian Welfare State in Prussia. Conservatives, Bureaucracy, and the Social Question, 1815–70. 1995.
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  60. E.g. Götz, H. H., Die geistigen Väter der sozialen Marktwirtschaft, in: Eick, J. (ed.), So nutzt man den Wirtschaftsteil einer Tageszeitung, Frankfurt am Main, 1971, pp. 57-61 or Rieter, H.; Schmolz, M., The Ideas of German Ordoliberalism 1938–1945: Pointing the Way to a New Economic Order, in: The European Journal of the History of Economic Thought 1, London, 1993, pp. 87-114.
  61. Blumenberg-Lampe, C. (ed.), Der Weg in die Soziale Marktwirtschaft: Referate, Protokolle, Gutachten der Arbeitsgemeinschaft Erwin von Beckerath 1943–1947, Stuttgart, 1986, p. 192.
  62. Grossekettler, H., Adolf Lampe, die Transformationsprobleme zwischen Friedens- und Kriegswirtschaften und die Arbeitsgemeinschaft Erwin von Beckerath, in: Goldschmidt, N. (ed.), Wirtschaft, Politik und Freiheit, Freiburg im Breisgau, 2005, p. 104 and Blumenberg-Lampe, C., Das Wirtschaftspolitische Programm der "Freiburger Kreise", Berlin, 1973, p. 64.
  63. Röpke, W., Grundfragen rationeller Wirtschaftspolitik, in: Zeitschrift für Schweizer Statistik & Volkswirtschaft, no. 1, 1941, p. 112; Idem, Civitas Humana – Grundfragen der Gesellschafts- und Wirtschaftsordnung, Erlenbach-Zurich, 1944.
  64. Müller-Armack, A., Wirtschaftslenkung und Marktwirtschaft, Hamburg, 1946, p. 88. However, the question of the origins of the term Soziale Marktwirtschaft is still controversial. In his autobiography Wahrheit und Wirklichkeit. Der Weg aus den Weltkriegen in die Soziale Marktwirtschaft und eine künftige Weltordnung, Homburg-Saarplatz, 1996, pp. 571 ff., Karl Günther Weiss, academic assistant to the former permanent representative of the State Secretary in the Reich Ministry of Economics, Otto Ohlendorf, argues, the term 'social market economy' was the outcome of a discussion with Ludwig Erhard on 12 Jan 1945. There is also some evidence that Harold Rasch, who in 1946/47 was deputy head of the inter-zonal economic administration in Minden, used the term in late 1947 and early 1948 independently of Müller-Armack (1901–1978); cf. Rasch, H., Grundlagen der Wirtschaftsverfassung, Bad Godesberg, 1948.
  65. Müller-Armack, A., Soziale Marktwirtschaft – Handwörterbuch der Sozialwissenschaften, vol. 9, Göttingen, 1956, p. 390; Idem, Wirtschaftsordnung und Wirtschaftspolitik, Studien und Konzepte zur Sozialen Marktwirtschaft und zur Europäischen Integration, Freiburg im Breisgau, 1966, p. 245.
  66. Commun, P., Erhards Bekehrung zum Ordoliberalismus: Die grundlegende Bedeutung des wirtschaftspolitischen Diskurses in Umbruchszeiten, in: Freiburg Discussion Papers on Constitutional Economics 04/4, Freiburg im Breisgau, 2004.
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  68. Wörtliche Berichte über die 1.-40. Vollversammlung des Wirtschaftsrates des Vereinigten Wirtschaftsgebietes (Zweizonen-Wirtschaftsrat) in Frankfurt am Main, 8 vols., Wiesbaden/ Frankfurt am Main, 1947–1949, pp. 436 ff.
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  • Allen, Christopher S. "Ideas, institutions and organized capitalism: The German model of political economy twenty years after unification." German politics and society;; 28.2 (2010): 130-150.
  • Nicholls, Anthony James. Freedom with responsibility: the social market economy in Germany, 1918-1963 (Oxford UP, 2000).
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In German

  • Abelshauser, Werner (2004). Deutsche Wirtschaftsgeschichte: seit 1945. C. H. Beck. ISBN 978-3-406-51094-6.

Social market economy
Social market economy Language Watch Edit This article is about the Western European system For the economic system in the People s Republic of China see Socialist market economy The social market economy SOME German soziale Marktwirtschaft also called Rhine capitalism and social capitalism 1 is a socioeconomic model combining a regulated free market capitalist economic system alongside social policies that establish both fair competition within the market and generally a welfare state 2 3 It is sometimes classified as a coordinated market economy 4 The social market economy was originally promoted and implemented in West Germany by the Christian Democratic Union under Chancellor Konrad Adenauer in 1949 5 and today it is used by Christian Democrats and Social Democrats alike Its origins can be traced to the interwar Freiburg school of economic thought 6 The social market economy was designed to be a third way between laissez faire economic liberalism and socialist economics 7 It was strongly inspired by distributism and ordoliberalism 8 which was influenced by the political ideology of Christian democracy 9 7 The social market economy is used by ordoliberals social liberals and modern not Marxist social democrats Social market refrains from attempts to plan and guide production the workforce or sales but it does support planned efforts to influence the economy through the organic means of a comprehensive economic policy coupled with flexible adaptation to market studies Combining monetary credit trade tax customs investment and social policies as well as other measures this type of economic policy aims to create an economy that serves the welfare and needs of the entire population thereby fulfilling its ultimate goal 10 The social segment is often wrongly confused with socialism and democratic socialism Although aspects were inspired by democratic socialism the social market approach rejects the socialist ideas of replacing private property and markets with social ownership and economic planning The social element of the model instead refers to support for the provision of equal opportunity and protection of those unable to enter the free market labor force because of old age disability or unemployment 11 Some authors use the term social capitalism with roughly the same meaning as social market economy 12 13 14 It is also called Rhine capitalism typically when contrasting it with the Anglo Saxon model of capitalism 15 16 17 18 Rather than see it as an antithesis some authors describe Rhine capitalism as a successful synthesis of the Anglo American model with social democracy 19 The German model is also contrasted and compared with other economic models some of which are also described as third ways or regional forms of capitalism including Tony Blair s Third Way French dirigisme the Dutch polder model the Nordic model Japanese corporate capitalism and the contemporary Chinese model 20 A 2012 comparative politics textbook distinguishes between the conservative corporatist welfare state arising from the German social market economy and the labor led social democratic welfare state 21 The concept of the model has since been expanded upon into the idea of an eco social market economy as not only taking into account the social responsibility of humanity but also the sustainable use and protection of natural resources Countries with a social market economy include Austria the Czech Republic Germany Poland and the United Kingdom Contents 1 Model 1 1 Rhine capitalism 1 2 Social capitalism model 1 3 Main elements 2 History 2 1 Germany 2 2 United Kingdom 3 Criticism 4 See also 5 Notes 6 Further reading 6 1 In German 7 External linksModel EditSocial market economies aims to combine free initiative and social welfare on the basis of a competitive economy 22 The social market economy is opposed to laissez faire policies and to socialist economic systems 23 and combines private enterprise with regulation and state intervention to establish fair competition maintaining a balance between a high rate of economic growth low inflation low levels of unemployment good working conditions social welfare and public services 24 The term social was established by Adenauer to prevent further reference to Christian socialism 25 which was used in the early party agenda Ahlener Programm in 1947 26 Although the social market economy model evolved from ordoliberalism this concept was not identical with the conception of the Freiburg School as it emphasized the state s responsibility to work actively to improve the market condition and simultaneously to pursue a social balance In contrast to Walter Eucken who sought an answer to the social question by establishing a functioning competitive order within a constitutional framework Alfred Muller Armack conceived the social market economy as a regulatory policy idea aiming to combine free enterprise with a social program that is underpinned by market economic performance 27 In putting social policy on par with economic policy Muller Armack s concept was more emphatic regarding socio political aims than the ordoliberal economic concept This dual principle also appeared in the name of the model Although the adjective social often attracted criticism as a decorative fig leaf or conversely as a gateway for antiliberal interventionism 28 it meant more than simply distinguishing the concept from that of laissez faire capitalism on the one side and of ordoliberal conceptions on the other 29 In drawing on Wilhelm Ropke s anthropo sociological approach of an economic humanism leading to a Civitas Humana 30 Muller Armack pursued a Social Humanism or Social Irenics the notion irenics derives from the Greek word eἰrhnh eirene which means being conducive to or working toward peace moderation or conciliation to overcome existing differences in society Therefore the social market economy as an extension of neoliberal thought was not a defined economic order but a holistic conception pursuing a complete humanistic societal order as a synthesis of seemingly conflicting objectives namely economic freedom and social security 31 This socio economic imperative actively managed by a strong state in contrast to the ordoliberal minimal state solely safeguarding the economic order 32 is often labelled by the ambiguous but historical term Der Dritte Weg The Third Way The concept of the social market economy received fundamental impulses from reflection and critique of historical economic and social orders namely Smithian laissez faire liberalism on the one hand and Marxian socialism on the other Furthermore various Third Way conceptions prepared the ground for the socio economic concept Already in the late 19th century the Kathedersozialisten Catheder Socialists engaged in social reforms in the Verein fur Socialpolitik turning away from pure liberalism to demand a purposive state policy designed to regulate economic life and advocating a middle course between anarchic individualism traditionalistic corporatism and bureaucratic etatism 33 In the early 20th century the Frankfurt sociologist and economist Franz Oppenheimer postulated a so called liberal socialism i e socialism achieved via liberalism as the pursuit of a societal order in which economic self interest preserves its power and persists in free competition 34 This desirable order of freedom and equality was labelled by a later programmatic publication entitled Weder so noch so Der dritte Weg Neither thus nor thus The third way 35 This position was widely shared by Oppenheimer s doctoral student and friend Ludwig Erhard 36 though the latter displaced adjective and subject by promoting a social liberalism 37 and never liked the expression Third Way 38 In his opinion the term was tainted reminding him too much about ideas of a mixed economy somewhere between a market economy and central planning He vehemently and consistently argued against the view that models were converging 39 Further in contrast to Muller Armack who emphasised the social aspect for Erhard the social market economy was always first and foremost a market economic system 40 By proclaiming the freer an economy is the more social it is 41 Erhard once told Friedrich Hayek that the free market economy did not need to be made social but that it was social in its origin 42 Erhard was rather inclined to Walter Eucken s ordoliberal competitive market order Although he even considered himself an ordoliberal 43 Erhard based his economic conception neither on Eucken nor on Muller Armack In fact his doctoral supervisor Oppenheimer and especially Ropke like Erhard a student of Oppenheimer was his source of inspiration 44 Erhard perceived Ropke s books as works of revelation and considered the economist a brother in spirit 45 On 17 August 1948 Erhard referred to Muller Armack by whom he was strongly impressed most of all not as a theorist but instead as one who wanted to transfer theory into practice 46 and his concept of the social market economy Soon after at the second party congress of the Christian Democratic Union in the British zone in Recklinghausen on 28 August 1948 Erhard circumscribed the concept as a socially committed market economy 47 Whereas most neoliberal economists viewed the concept not only as an economic path between the Scylla of an untamed pure laissez faire capitalism and the Charybdis of a collectivist planned economy but also as a holistic and democratic social order Erhard and in particular Muller Armack emphasised public acceptance and civic engagement as prerequisites for the success of the socio economic model 48 For instance Muller Armack stressed that by more socialism he meant the social engagement for and with the people 49 Equally Erhard pointed out that the principles of the social market economy could only be achieved if the public was determined to give them priority 50 Important figures in the development of the concept include Eucken Ropke Alexander Rustow Franz Bohm Oppenheimer Erhard Constantin von Dietze and Muller Armack who originally coined the term Soziale Marktwirtschaft 51 They share an involvement in the Anti Nazi Opposition whose search for a post Nazi order for Germany is an important background for the development of this concept Early protagonists had close contacts to the oppositional church movement Bekennende Kirche and Dietrich Bonhoeffer and emphasized the reference of their concept to Catholic and Protestant social ethics 52 Rhine capitalism Edit Michel Albert described a similar concept Rhine capitalism He compared the so called neo American model of a capitalistic market economy introduced by the administrations of Ronald Reagan and Margaret Thatcher with what he called Rhine capitalism present in Germany France and in some of the Northern European economies While the neo American model builds largely on the ideas of Friedrich von Hayek and Milton Friedman Rhine capitalism according to Albert has its foundations on publicly organized social security Albert analyzes the Rhenish model as the more equitable efficient and less violent one However according to Albert complex psychological phenomena and the functioning of the press lets the American model appear more attractive and dynamic to the general public 53 Social capitalism model Edit Social capitalism as a theory or political or philosophical stance challenges the idea that the capitalist system is inherently antagonistic to social goals or to a political economy characterized by greater economic equality 12 The essence of the social market economy is the view that private markets are the most effective allocation mechanism but that output is maximized through sound state macroeconomic management of the economy Social market economies posit that a strong social support network for the less affluent enhances capital output By decreasing poverty and broadening prosperity to a large middle class capital market participation is enlarged Social market economies also posit that government regulation and even sponsorship of markets can lead to superior economic outcomes as evidenced in government sponsorship of the Internet or basic securities regulation Main elements Edit The main elements of the social market economy in Germany are the following 54 The social market contains central elements of a free market economy such as private property free foreign trade exchange of goods and free formation of prices In contrast to the situation in a free market economy the state is not passive and actively implements regulative measures 55 Some elements such as pension insurance universal health care and unemployment insurance are part of the social security system These insurances are funded by a combination of employee contributions employer contributions and government subsidies The social policy objectives include employment housing and education policies as well as a socio politically motivated balancing of the distribution of income growth In addition there are provisions to restrain the free market e g antitrust code laws against the abuse of market power and so on These elements help to diminish many of the occurring problems of a free market economy 56 History EditGermany Edit The social market economy was born and formed in times of severe economic but equally socio political crises Its conceptual architecture was set by particular historical experiences and political prerequisites Germany s preoccupation with the social question since the late 19th century the criticism of liberal capitalism triggered by the world economic crisis of the early 1930s and a pronounced anti totalitarianism as well as anti collectivism formed by the experiences of the Third Reich These led to the eventual development of the social market economy as a viable socio political and economic alternative between the extremes of laissez faire capitalism and the collectivist planned economy not as a compromise but as a combination of seemingly conflicting objectives namely greater state provision for social security and the preservation of individual freedom 57 One of the major factors for the emergence of the German model of capitalism was to ameliorate the conditions of workers under capitalism and thus to stave off the threat of Karl Marx s militant socialist movement Germany implemented the world s first welfare state and universal healthcare program in the 1880s Chancellor Otto von Bismarck developed a program in which industry and state work closely to stimulate economic growth by giving workers greater security To trump the militant socialists Bismarck gave workers a corporate status in the legal and political structures of the German Empire 58 In March 1884 Bismarck declared The real grievance of the worker is the insecurity of his existence he is not sure that he will always have work he is not sure that he will always be healthy and he foresees that he will one day be old and unfit to work If he falls into poverty even if only through a prolonged illness he is then completely helpless left to his own devices and society does not currently recognize any real obligation towards him beyond the usual help for the poor even if he has been working all the time ever so faithfully and diligently The usual help for the poor however leaves a lot to be desired especially in large cities where it is very much worse than in the country 59 Bismarck s program centered squarely on providing universal social insurance programs designed to increase productivity and focus the political attentions of the German workers on supporting Kaiser Wilhelm I The program included universal healthcare compulsory education sickness insurance accident insurance disability insurance and a retirement pension none of which were then in existence to any great degree anywhere else in the world After the collapse of the totalitarian Third Reich with its statist and corporatist economic policy economists and academics at the University of Freiburg im Breisgau in Germany advocated a neoliberal or new liberal and socio economic order In this context it is important to distinguish between the ordoliberal Freiburg School or Freiburg School of Law and Economics and the Freiburg Circles Frequently the two schools of thought were believed to be the same 60 although the first emerged from the latter and among the members of the Freiburg School only the founders Walter Eucken and Franz Bohm belonged to the Freiburg Circles and conversely no member of the Freiburg Circles can be attributed to the Freiburg School which partly advocated different economic objectives Both schools of economic thought considered that a certain form of planning was necessary for a transitional period following the war However whereas the pivotal members of the Freiburg Circles Erwin von Beckerath Adolf Lampe and Jens Jessen favoured productive governmental intervention i e an economy regulated by a relatively strong state 61 Eucken Bohm and Constantin von Dietze believed in self regulating market forces and limited indirect state interference 62 According to Eucken and his competitive order labelled ordoliberalism the state must solely create a proper legal environment for the economy and maintain a healthy level of competition through measures that follow market principles Thus the paramount means by which economic policy can seek to improve the economy is by improving the institutional framework or ordo citation needed In drawing on both Eucken s ordoliberal competitive order and Wilhelm Ropke s economic humanism leading to a Civitas Humana 63 the ordoliberal competitive order was further developed by the Cologne School around the economist and anthropologist Alfred Muller Armack who therefore coined the term Soziale Marktwirtschaft social market economy in a publication in December 1946 64 Although it evolved from ordoliberalism as a new variant of neoliberalism this concept was not identical with the conception of the Freiburg School In contrast to Eucken who favoured a strictly procedural or rule oriented liberalism in which the state solely sets the institutional framework and abstains generally from interference in the market Muller Armack emphasised the state s responsibility actively to improve the market condition and simultaneously to pursue a social balance 65 In putting social policy on a par with economic policy Muller Armack s concept was more emphatic regarding socio political aims than the ordoliberal economic concept However the social market economy as an extension of neoliberal thought was deliberately not a defined economic order but an adjustable holistic conception pursuing a complete humanistic societal order as a synthesis of seemingly conflicting objectives namely economic freedom and social security 31 Although it is often viewed as a melange of socio political ideas rather than a precisely outlined theoretical order the conception possessed an effective slogan which facilitated its communication to both politics and the public However the eventual implementation required not only communication but also political backup citation needed Muller Armack s concept soon met with the conception of the then Chairman of the Sonderstelle Geld und Kredit Special Bureau for Money and Credit within the Administration for Finance i e an expert commission preparing the currency reform in the then Anglo American Bizone Ludwig Erhard Although Erhard was rather inclined to Eucken s ordoliberal competitive market order 66 and even considered himself an ordoliberal 67 he was strongly impressed by Muller Armack most of all not as a theorist but instead as one who wanted to transfer theory into practice 46 When Erhard succeeded Johannes Semmler as Director of the Administration for Economics in the Bizonal Economic Council on 2 March 1948 the social market economy entered the political sphere Soon after on 21 April 1948 Erhard informed the parliament about his economic policy and introduced the concept of the social market economy 68 Although there was no unanimous applause both the liberal democrats and the conservatives widely welcomed the transition to a more market oriented economy 69 Thereupon the Chairman of the Christian Democratic Union CDU in the British zone of occupation Konrad Adenauer invited Erhard to also inform the party members about his socio economic conception at the party convention in Recklinghausen Germany on 28 August 1948 In a visionary and stirring speech entitled Marktwirtschaft im Streit der Meinungen Market Economy in Dispute 70 Erhard defended his concept of the social market economy alluding to the dualism between a controlled economy and a market economy 71 In view of the upcoming regional and federal elections Adenauer who was initially sceptical about Erhard 72 was not only impressed by the polarising slogan i e Controlled or Market Economy but also by the efficacy of Erhard and his programme 73 The foundation for a successful political alliance was laid citation needed Konrad Adenauer a proponent of the social market economy Chancellor Konrad Adenauer of the ruling CDU implemented a new novel economic order amalgamating the promotion of free competition with the responsibility of the social government The Wirtschaftswunder or economic miracle of West Germany could not have been brought about without secure social peace in the country Adenauer s program centered on legislation establishing co determination in the coal and steel industry the system of employee property formation the equalization of burdens the creation of subsidized housing child benefits the agricultural Green Plan and the dynamism of pensions 74 On 20 June 1948 the principles of the social market economy espoused by the CDU became the foundation of modern German economic policy The social market economy is the socially anchored law for the industrial economy according to which the achievements of free and able individuals are integrated into a system that produces the highest level of economic benefit and social justice for all This system is created by freedom and responsibility which find expression in the social market economy through genuine performance based competition and the independent control of monopolies Genuine performance based competition exists when the rules of competition ensure that under conditions of fair competition and equal opportunity the better performance is rewarded Market driven prices regulate the interaction between all market participants 75 After the Christian Social Union CSU also expressed its commitment to a market economy with social balance and the then newly elected Bavarian Minister for Economic Affairs Hanns Seidel advocated Erhard s liberal and social economic model at the CSU s party convention in Straubing in May 1949 76 the economic principles elaborated by the Working Committee of the CDU CSU as liaison body and information centre of the two political parties commonly referred to as the Union centred the social market economy 77 Finally these principles were adopted as party platform and manifesto for the upcoming federal elections at the CDU s party conference in Dusseldorf on 15 July 1949 78 In contrast to the previous ideological Ahlener Programm suggesting a rather abstract and anti materialist Gemeinwirtschaft 79 these so called Dusseldorfer Leitsatze not only provided a concrete pragmatic and materialist economic programme but also an attractive slogan to reach consensus within the party and the public While eventually the union of the two recently established political parties i e the CDU and the CSU possessed a coherent and unifying economic programme enabling a more consistent public front the oldest German political party the Social Democratic Party SPD led by the advocate of economic planning and extensive socialisation Kurt Schumacher did not introduce its own economic concept This not only complicated the parliamentary work of the party in the Economic Council but also limited the public relations of the party as a whole especially in times of campaigning where the partially complex political programmes were simplified and popularised citation needed In the run up to the federal elections in August 1949 the CDU CSU consequently aligned their party platforms policies and manifestos and campaigned with the social market economy In particular the former advertising manager for consumer goods Ludwig Erhard who affirmed that he would go into the upcoming political party clashes with particular energy for the CDU 80 realised the potential of subtle and systematic marketing to transform the concept from an economic theory or even abstract economic policy into the basis of a political party s propaganda and public image that held broad appeal Eventually on Sunday 14 August 1949 around 31 million Germans were called to cast a vote for the first German Bundestag and to decide between the social market economy and a controlled economy advocated by the SPD Of those eligible to vote 25 million or 78 5 per cent actually went to the ballot boxes and showed a clear commitment to the emerging post war democracy citation needed Although the SPD turned out to be the most successful single party by gaining 29 12 per cent of the votes the CDU CSU combined attracted more votes totalling 31 per cent and 139 mandates compared to 131 for the SPD However in fact both Volksparteien had suffered large percentage losses over their previous Land election totals by failing to capture a comparable share of the enlarged electorate The most remarkable advance by winning over a million extra votes and achieving 11 9 per cent of the total votes was that made by the liberal Free Democratic Party FDP led by the chairman Theodor Heuss The economically liberal FDP were in fact the only political party consistently gaining percentage of votes between 1946 and 1949 While these results affirmed the then general pro market trend in public opinion eventually the electorate made its decision contingent on the satisfaction of its practical needs rather than on any particular theoretical economic system The advantage of the CDU and the CSU lay precisely in the fact that they were quasi governing across the Bizone and thus increasingly identified with the economic recovery and the improving economic conditions Although the implementation of the social market economy benefited also from other crucial factors including the East West conflict and a favourable political and social climate within Germany and abroad the stabilising alliance between the conservative and liberal parties the pro market composition of the Economic Council and even the Federal Republic s own Grundgesetz Basic Law which stressed individual freedom human dignity and the subsidiarity of societal organisation it was also the consistent efforts at political communication of the cooperative and corporate model that led to the implementation and eventual electoral validation of the social market economy in post war West Germany 81 At first controversial the model became increasingly popular in West Germany and Austria since in both states economic success Wirtschaftswunder was identified with it From the 1960s the social market economy was the main economic model in mainland Western Europe pursued by administrations of both the centre right led by the CDU CSU and the centre left led by the SPD The concept of the social market economy is still the common economic basis of most political parties in Germany 82 and a commitment to some form of social market economy is present in Article 3 of the Treaty on European Union citation needed United Kingdom Edit In the United Kingdom the concept of the social market economy was first introduced by the Conservative politician Keith Joseph 83 Following World War II the main political parties agreed on the nationalization of industry and close economic regulation In the 1970s Joseph introduced the idea as an alternative to the post war consensus allowing free markets for competition and innovation whilst the role of government was to help hold the ring provide infrastructure maintain a stable currency a framework of laws implementation of law and order provision of a safety net welfare state defence of property rights and all other rights involved in the economic process Throughout his political career Joseph used his position to restate the principles of the social market economy and re direct Conservative policy in Britain 84 Joseph eventually set up a think tank in 1974 to study the model and initially called it the Ludwig Erhard Foundation and Institute for a Social Market Economy before settling on the name Centre for Policy Studies 85 Criticism EditAlthough one of the main factors for the emergence of the European model of capitalism was to attempt to ameliorate the conditions of workers under capitalism and thus stave off the emergence of socialism or socialist revolution 86 critics identify the social market model with the notions of the welfare state and sometimes mistakenly identify it as being socialistic 12 87 88 See also EditChristian democracy Co determination Dirigisme Libertarian socialism Market economy Market socialism Nordic model Ordoliberalism Social corporatism Social democracy Social ownership Tripartism Types of capitalism Welfare capitalismNotes Edit Tristan Claridge 9 May 2017 Social Capitalism and Social Capital Definitions and Discussion Socialcapitalresearch com Retrieved 1 March 2020 Social Market Economics Dictionary The Economist Ralph M Wrobel Social Market Economy as Alternative Approach of Capitalism after the Financial and Economic Crisis PDF Cite journal requires journal help Kopst in amp Lichbach 2005 p 156harvnb error no target CITEREFKopst inLichbach2005 help Spicka 2007 p 2 Steffen Mau 2003 Moral Economy of Welfare States Routledge p 74 ISBN 978 1 134 37055 9 a b Abelshauser 2004 p 89 93 Nils Goldschmidt Hermann Rauchenschwandtner 2007 The Philosophy of Social Market Economy Michel Foucault s Analysis of Ordoliberalism Universitat Freiburg Freiburger Diskussionspapiere zur Ordnungsokonomik hdl 10419 4374 Lamberts Emiel 1997 Christian Democracy in the European Union 1945 1995 Proceedings of the Leuven Colloquium 15 18 November 1995 Leuven University Press p 478 ISBN 9789061868088 GHDI Document Page Marcus Marktanner Addressing the Marketing Problem of the Social Market Economy PDF Cite journal requires journal help a b c Steven Hill 2010 Europe s Promise Why the European Way is the Best Hope in an Insecure Age University of California Press pp 19 20 ISBN 978 0 520 24857 1 Matthias Zimmer 1997 Germany phoenix in Trouble University of Alberta p 157 ISBN 978 0 88864 305 6 Lowell Turner 1998 Fighting for Partnership Labor and Politics in Unified Germany Cornell University Press p 18 ISBN 0 8014 8483 9 Naoshi Yamawaki 2002 Walter Eucken and Wilhelm Ropke A reappraisal of their economic thought and the policy of ordoliberalism In Yuichi Shionoya ed German Historical School Routledge p 199 ISBN 1 134 62044 6 Abigail B Bakan Eleanor MacDonald 2002 Critical Political Studies Debates and Dialogues from the Left McGill Queen s Press pp 69 70 ISBN 978 0 7735 6956 0 Sally Wheeler 2002 Corporations and the Third Way Hart Publishing p 17 ISBN 978 1 901362 63 3 Tadeusz Kowalik 2003 Systemic Variety under the Conditions of Globalization and Integration In Grzegorz W Kolodko ed Emerging Market Economies Globalization and Development Ashgate Publishing Ltd pp 214 215 ISBN 978 0 7546 3706 6 Susan Albers Mohrman Philip H Mirvis Christopher G Worley Abraham B Shani 2013 Building Networks for Sustainable Effectiveness Emerald Group Publishing p 16 ISBN 978 1 78190 887 7 Melanie Walker Jon Nixon 2004 Reclaiming Universities from a Runaway World McGraw Hill International p 78 ISBN 978 0 335 21291 0 Lowell Barrington 6 January 2012 Comparative Politics Structures and Choices 2nd ed Cengage Learning pp 43 and 71 ISBN 978 1 133 71036 3 Muller Armack A Soziale Marktwirtschaft Handworterbuch der Sozialwissenschaften vol 9 Gottingen 1956 p 249 James C Van Hook Rebuilding Germany The Creation of the Social Market Economy 1945 1957 Cambridge University Press 2004 ISBN 0 521 83362 0 p 185 Gabler Wirtschaftslexikon Soziale Marktwirtschaft Mark E Spicka 2007 Selling the Economic Miracle Economic Reconstruction and Politics in West Germany 1949 1957 Berghahn Books ISBN 978 1 84545 223 0 p 80 Mark E Spicka 2007 Selling the Economic Miracle Economic Reconstruction and Politics in West Germany 1949 1957 Berghahn Books ISBN 978 1 84545 223 0 p 53 Muller Armack A Soziale Marktwirtschaft Handworterbuch der Sozialwissenschaften vol 9 Gottingen 1956 p 390 Idem Wirtschaftsordnung und Wirtschaftspolitik Studien und Konzepte zur Sozialen Marktwirtschaft und zur Europaischen Integration Freiburg im Breisgau 1966 p 245 Hayek F A v Was ist und was heisst sozial in Hunold A ed Masse und Demokratie Erlenbach Zurich Stuttgart 1957 pp 71 ff See also the contributions of Wunsche H F Welcher Marktwirtschaft gebuhrt das Beiwort sozial and Wartin C Zur sozialen Dimension marktwirtschaftlicher Ordnungen in Hohmann K Schonwitz D Weber H J Wunsche H F eds Grundtexte zur Sozialen Marktwirtschaft Band 2 Das Soziale in der Sozialen Marktwirtschaft Stuttgart New York 1988 pp 21 31 and pp 411 415 Nicholls A J The Bonn Republic West German Democracy 1945 1990 London New York 1997 pp 59 ff Ropke W Civitas Humana Grundfragen der Gesellschafts und Wirtschaftsordnung Erlenbach Zurich 1944 a b Muller Armack A Auf dem Weg nach Europa Erinnerungen und Ausblicke Tubingen Stuttgart 1971 pp 50 ff In regard to the different conceptions of the state see the study Lange von Kulessa J Renner A Die Soziale Marktwirtschaft Alfred Muller Armacks und der Ordoliberalismus der Freiburger Schule Zur Unvereinbarkeit zweier Staatsauffassungen in ORDO 49 Stuttgart 1998 pp 79 104 Nipperdey Th Deutsche Geschichte 1866 1918 Erster Band Arbeitswelt und Burgergeist Munich 1993 p 336 Oppenheimer F System der Soziologie III 1 Band 3 Theorie der reinen und politischen Okonomie Teil 1 Grundlagen Jena 1910 p 9 The economist Franz Oppenheimer 1864 1943 also published his economic conception in Sprung uber ein Jahrhundert Bern Leipzig 1935 under the pseudonym F D Pelton Oppenheimer F Weder so noch so Der dritte Weg Potsdam 1933 Oppenheimer supervised Erhard s doctoral thesis titled Wesen und Inhalt der Werteinheit namely a study on various historical schools perception of character and content of value in the years 1922 to 1925 Erhard L Franz Oppenheimer dem Lehrer und Freund 1964 in Hohmann K ed Ludwig Erhard Gedanken aus funf Jahrzehnten Reden und Schriften Dusseldorf Vienna New York 1988b p 861 Regarding the influence of Oppenheimer on Erhard see Wunsche H F Der Einfluss Oppenheimers auf Erhard und dessen Konzeption von der Sozialen Marktwirtschaft in Caspari V Schefold B eds Franz Oppenheimer und Adolph Lowe Zwei Wirtschaftswissenschaftler der Frankfurter Universitat Marburg 1996 pp 141 161 Haselbach D Franz Oppenheimer s Theory of Capitalism and of a Third Path in Koslowski P ed The Theory of Capitalism in the German Economic Tradition Historism Ordo Liberalism Critical Theory Solidarism Berlin et al 2000 pp 54 86 Erhard L Wirtschaft und Bildung 17 Aug 1957 reprinted in Hohmann K ed l c 1988b p 515 Comparative study Goldschmidt N Alfred Muller Armack and Ludwig Erhard Social Market Liberalism in CREPHE CREA Histoire du Liberalisme en Europe Brochure no 21 Paris 2004 Erhard L Wirken und Reden Ludwigsburg 1966 p 320 F A Hayek The Fatal Conceit The Errors of Socialism University of Chicago Press 1991 p 117 Erhard L Deutsche Wirtschaftspolitik Der Weg der Sozialen Marktwirtschaft Dusseldorf Vienna New York Moscow 1992 originally published in 1962 p 592 Nicholls A J l c 1994 Hentschel V Ludwig Erhard Ein Politikerleben Berlin 1998 pp 75 78 a b Hentschel V Ludwig Erhard Ein Politikerleben Berlin 1998 p 25 Erhard L Marktwirtschaft im Streit der Meinungen printed in Erhard L Deutsche Wirtschaftspolitik Der Weg der Sozialen Marktwirtschaft Dusseldorf Vienna New York Moscow 1992 p 70 Finally Erhard used and described the term in an article in the Berliner Tagesspiegel on 23 April 1949 Muller Armack A The Social Market Economy as an Economic and Social Order in Review of Social Economy 36 Washington D C 1978 pp 326 f Muller Armack A Religion und Wirtschaft Bern Stuttgart 1950 pp 559 ff Erhard L Wohlstand fur alle Gutersloh 1963 p 11 Friedrich Carl J 1955 The Political Thought of Neo Liberalism American Political Science Review American Political Science Association 49 2 509 525 doi 10 2307 1951819 JSTOR 1951819 Christine Blumenthal Lampe Das wirtschaftspolitische Programm der Freiburger Kreise Entwurf einer freiheitlich sozialen Nachkriegswirtschaft Berlin 1973 Harald Jung Soziale Marktwirtschaft und weltliche Ordnung Berlin 2009 Michel Albert Capitalism Against Capitalism Whurr 1993 ISBN 978 1 870332 54 5 Roman Herzog Institute Social Market Economy in Germany Archived 2011 02 24 at the Wayback Machine german keyword social market economy Soziale Marktwirtschaft Duden Wirtschaft von A bis Z Grundlagenwissen fur Schule und Studium Beruf und Alltag 2 Aufl Mannheim Bibliographisches Institut amp F A Brockhaus 2004 Lizenzausgabe Bonn Bundeszentrale fur politische Bildung 2004 Gabler Wirtschaftslexikon Eintrag keyword social market economy Soziale Marktwirtschaft Glossner C L Gregosz D The Formation and Implementation of the Social Market Economy by Alfred Muller Armack and Ludwig Erhard Sankt Augustin Berlin 2011 S 32 E P Hennock Social Policy under the Empire Myths and Evidence German History 1998 16 1 58 74 Herman Beck The Origins of the Authoritarian Welfare State in Prussia Conservatives Bureaucracy and the Social Question 1815 70 1995 Frederic B M Hollyday Bismarck 1970 p 65 E g Gotz H H Die geistigen Vater der sozialen Marktwirtschaft in Eick J ed So nutzt man den Wirtschaftsteil einer Tageszeitung Frankfurt am Main 1971 pp 57 61 or Rieter H Schmolz M The Ideas of German Ordoliberalism 1938 1945 Pointing the Way to a New Economic Order in The European Journal of the History of Economic Thought 1 London 1993 pp 87 114 Blumenberg Lampe C ed Der Weg in die Soziale Marktwirtschaft Referate Protokolle Gutachten der Arbeitsgemeinschaft Erwin von Beckerath 1943 1947 Stuttgart 1986 p 192 Grossekettler H Adolf Lampe die Transformationsprobleme zwischen Friedens und Kriegswirtschaften und die Arbeitsgemeinschaft Erwin von Beckerath in Goldschmidt N ed Wirtschaft Politik und Freiheit Freiburg im Breisgau 2005 p 104 and Blumenberg Lampe C Das Wirtschaftspolitische Programm der Freiburger Kreise Berlin 1973 p 64 Ropke W Grundfragen rationeller Wirtschaftspolitik in Zeitschrift fur Schweizer Statistik amp Volkswirtschaft no 1 1941 p 112 Idem Civitas Humana Grundfragen der Gesellschafts und Wirtschaftsordnung Erlenbach Zurich 1944 Muller Armack A Wirtschaftslenkung und Marktwirtschaft Hamburg 1946 p 88 However the question of the origins of the term Soziale Marktwirtschaft is still controversial In his autobiography Wahrheit und Wirklichkeit Der Weg aus den Weltkriegen in die Soziale Marktwirtschaft und eine kunftige Weltordnung Homburg Saarplatz 1996 pp 571 ff Karl Gunther Weiss academic assistant to the former permanent representative of the State Secretary in the Reich Ministry of Economics Otto Ohlendorf argues the term social market economy was the outcome of a discussion with Ludwig Erhard on 12 Jan 1945 There is also some evidence that Harold Rasch who in 1946 47 was deputy head of the inter zonal economic administration in Minden used the term in late 1947 and early 1948 independently of Muller Armack 1901 1978 cf Rasch H Grundlagen der Wirtschaftsverfassung Bad Godesberg 1948 Muller Armack A Soziale Marktwirtschaft Handworterbuch der Sozialwissenschaften vol 9 Gottingen 1956 p 390 Idem Wirtschaftsordnung und Wirtschaftspolitik Studien und Konzepte zur Sozialen Marktwirtschaft und zur Europaischen Integration Freiburg im Breisgau 1966 p 245 Commun P Erhards Bekehrung zum Ordoliberalismus Die grundlegende Bedeutung des wirtschaftspolitischen Diskurses in Umbruchszeiten in Freiburg Discussion Papers on Constitutional Economics 04 4 Freiburg im Breisgau 2004 Erhard L Deutsche Wirtschaftspolitik Der Weg der Sozialen Marktwirtschaft Dusseldorf Vienna New York Moscow 1992 originally published in 1962 p 592 Wortliche Berichte uber die 1 40 Vollversammlung des Wirtschaftsrates des Vereinigten Wirtschaftsgebietes Zweizonen Wirtschaftsrat in Frankfurt am Main 8 vols Wiesbaden Frankfurt am Main 1947 1949 pp 436 ff Gortemaker M Geschichte der Bundesrepublik Deutschland Von der Grundung bis zur Gegenwart Munich 1999 p 148 Stoltenberg G Konrad Adenauer und die Soziale Marktwirtschaft in Die Politische Meinung edited by the Konrad Adenauer Stiftung KAS vol 45 373 Sankt Augin 2000 pp 21 f Erhard L l c 1992 pp 69 85 Muller Armack A l c 1971 p 247 Schwarz H P Adenauer Der Aufstieg 1876 1952 Stuttgart 1986 p 602 Biography of Konrad Adenauer Konrad Adenauer Stiftung Christian Democratic Union The CDU and the Social Market Economy Dusseldorf Guidelines for Economic Policy Agricultural Policy Social Policy and Housing 1949 Wirtschaftspolitische Richtlinien der CSU in Bayern supposedly end of 1948 Wirtschaftspolitische Leitsatze der Arbeitsgemeinschaft der CDU CSU presumably April 1949 Narr W D CDU SPD Programm und Praxis seit 1945 Stuttgart 1966 p 95 Ahlener Programm in Heck B ed Die CDU und ihr Programm Programme Erklarungen Entschliessungen Melle Sankt Augin 1979 pp 3 5 Wengst U Die CDU CSU im Bundestagswahlkampf 1949 in Viertelsjahreshefte fur Zeitgeschichte VfZ 34 no 1 Munich 1986 p 25 Glossner C L The Making of the German Post War Economy Political Communication and Public Reception of the social market economy after World War II London 2010 Hamburg Programme of the SPD page 24 http www parteitag spd de servlet PB show 1734195 Hamburger 20Programm 20engl pdf Archived 2008 09 11 at the Wayback Machine CDU on 60 years of social market economy http www cdu de politikaz wirtschaft php Wiesbaden Programme of the FDP page 14 http www fdp de files 565 wiesbaden declaration pdf Esmond Birnie 1994 Christianity and the Social Market Economy in Britain Germany and Northern Ireland PDF Journal of the Irish Christian Study Centre 5 Biffen John 12 December 1994 Keith Joseph via The Guardian Why is Labour still so obsessed with the German model Comparing Economic Systems in the Twenty First Century 2003 by Gregory and Stuart ISBN 0 618 26181 8 The European Model P 207 Karl Marx also influenced the European model indirectly through his warnings about the inherent instability of capitalism Western Europe composed of prosperous nations ruled by Marx s hated bourgeoisie feared that if the economy were left to its own devices Marx s prediction of collapse would come true and the proletariat would overthrow the ruling class Chancellor Otto von Bismarck introduced social welfare legislation in Germany between 1883 and 1888 despite violent political opposition as a direct attempt to stave off Marx s socialist revolution David B Reynolds 2002 Taking the High Road Communities Organize for Economic Change M E Sharpe p 31 ISBN 978 0 7656 0745 4 P G C van Schie Gerrit Voermann 2006 The Dividing Line Between Success and Failure A Comparison of Liberalism in the Netherlands and Germany in the 19th and 20th Centuries LIT Verlag Munster p 103 ISBN 978 3 8258 7668 5 Further reading EditAllen Christopher S Ideas institutions and organized capitalism The German model of political economy twenty years after unification German politics and society 28 2 2010 130 150 Crouch Colin Streeck Wolfgang 2000 Political Economy of Modern Capitalism Mapping Convergence and Diversity SAGE Publications ISBN 978 0 7619 5653 2 Koppstein Jeffrey Lichbach Mark Irving 2005 Comparative Politics Interests Identities And Institutions In A Changing Global Order Cambridge University Press ISBN 0 521 60395 1 Nicholls Anthony James Freedom with responsibility the social market economy in Germany 1918 1963 Oxford UP 2000 Ptak Ralf Neoliberalism in Germany Revisiting the Ordoliberal Foundations of the Social Market Economy in The Road from Mont Pelerin Harvard UP 2009 pp 98 138 Spicka Mark E 2007 Selling the Economic Miracle Reconstruction and Politics in West Germany Berghahn Books ISBN 978 1 84545 223 0 U S Library of Congress Germany The Social Market Economy countrystudies us not copyrightIn German Edit Abelshauser Werner 2004 Deutsche Wirtschaftsgeschichte seit 1945 C H Beck ISBN 978 3 406 51094 6 External links EditThe Social Market Economy United States Library of Congress Essay on Germany s Social Market Economy Archived 2005 05 11 at the Wayback Machine Short Definition from the Economist Retrieved from https en wikipedia org w 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