What is the social market economy?
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What is the social market economy?

Many people today have got the impression that our society is changing significantly. They are afraid of being left behind by accelerating economic development. But how important are individual people in the economy? And what are the responsibilities and tasks of the government? Let’s start by taking a look in the rear-view mirror: How did our economic order in Germany evolve? The first half of the twentieth century was shaped by two world wars… as well as the tumultuous economic and political periods of the Weimar Republic and the horrors of the Nazi dictatorship. Because of bad experiences with both a planned economy and the free market, these three, among others,… … developed a new economic and social order that we now know as the social market economy. First of all, it is a market based approach but with a very strong focus on free and fair competition with social adjustments. It became famous under the slogan “Prosperity for all… and property for everyone,” coined by the first minister of Economics of West Germany, Ludwig Erhard. The social market economy is centred on people. Human dignity requires the freedom to shape our lives independently through individual decision-making. That means freedom and personal fulfillment on one hand, responsibility for ourselves and our community on the other. The state ensures a fair share of opportunities and equal competition conditions for everyone… …while giving individuals and the market as much freedom as possible. That freedom is only restricted if it threatens the functioning of the market or the rights of others. if the market becomes unfair, the state can rein in the excessive power of individual companies through its rights of competition enforcement… or it may, for example, take steps to counteract environmental damage. Well-regulated competition guarantees participation in the market… and creates space for new ideas, new jobs, and adequate prices. But it also provides the infrastructure needed to enable participation in the market and in society… for example, by granting broad and equal access to education. Thus, the Christian view of humanity and its guiding principle of human dignity… lay the foundation for the relationship between individuals, the state and society. For the social market economy to work, individuals must take responsibility for themselves and the people around them as much as possible. Only when individuals cannot manage it alone… do they receive support from the community and the state. The state redistributes income… and thereby grants as well economic participation to the most vulnerable. Higher earners pay higher taxes. But those who have the desire and ability to go the extra mile are also given the flexibility they need to do business. That is the spirit of economic fairness. The ideas of the social market economy have shaped civic life in Germany for more than seventy years. We can continue to follow it as a guide,
as long as we keep refining it in response to current issues.

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3 thoughts on “What is the social market economy?

  1. Lol @ 2:20
    Where'd that come from lol
    I'm Christiam and I would hope the ideals of Christian thought permeates into society
    But that was straight out of left field lol

    I guess Luther is from Germany afterall

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