Working on this new server in php7...
imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
latest news
best of news




A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List


IMC Network:

Original Cities africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

Renaissance of the Social Market Economy

by Ulrich Thielemann Thursday, Oct. 07, 2021 at 2:17 PM

A social market economy is based on two political pillars: (1) taming the market dynamics via regulation and (2) mitigating its consequences in distribution policy. (3) The development and care of an economic culture of moderation and fairness in dealing with one another forms the third, the cultural pillar of taming and civilizing


By Ulrich Thielemann

Translated by Marc Batko and Ulrich Thielemann; published as Renaissance der Sozialen Marktwirtschaft, in: Perspektiefe, Zentrum Gesellschaftliche Verantwortung der Evangelischen Kirche in Hessen und Nassau, Nr. 44, Dezember 2017, S. 2-3. (An extended version will be published in Meinzer, M./Pohl, M. (ed.): Finanzethik und Steuergerechtigkeit, Wiesbaden 2020) Background.

The social market economy was an episode in the history of capitalism. It dominated at the end of the Second World War to the end of the 1970s everywhere in the developed world, in the US (“New Deal,” “Great Society”) and in Germany (“Rhine capitalism”). “Together with dismantling the social security system, profitability extremism spreading through competition ensures that jobs and employment perspectives will be precarious.”

What was the Social Market Economy?

The social market economy was marked by a broad sharing in the high economic growth. It was the time of the “great compression,” the reduction of former income disparities and wealth concentrations. Lower incomes grew stronger than higher incomes. Employees with average qualifications had good earnings too. Jobs were stable, offered opportunities for advancement and gave a feeling of security.

All this was brought about by a complex mix of regulations on the one hand and the establishment and development of social security systems on the other hand. Regulations always tame the market’s dynamics. The Institute of Labor Law has a moderating effect. Certain restrictions as to working hours, continued pay in case of sickness and protection from unlawful dismissals make the economy social.

At the same time, global markets were not nearly as open as today. This gave entrepreneurs and managers the leeway for acting responsibly. The predominant spirit was to find a fair balance between conflicting claims. The economy was palpably “embedded” in the social values of fairness and meaningfulness (Karl Polanyi, Wilhelm Ropke).

The Regime of Neoliberalism

Bit by bit, all this came to an end with the neoliberal revolution that began everywhere around the year 1980. Market logic should now govern in all situations of life. Previous market regulations should be dismantled or adjusted in a market-conforming way. Capital should now be “courted” since capital creates jobs (Hans-Werner Sinn). Correspondingly, the profit share in national income rose, and the labor share fell correspondingly. Wealth also grew disproportionately in relation to economic output, mostly accruing to the top one percent. Polarization of incomes also increased among employees. The share of mid-level incomes fell everywhere (“middle class squeeze”).

New jobs are compensated either very well or miserably. Within businesses, the spirit of moderation and balance evaporates in favor of profitability extremism. With every fiber, businesses are now oriented in maximizing shareholder value. Businesses act consistently opportunistically toward social claims. In the study of economics, the up-and-coming generation is told anything else would be irrational. Morality is downgraded to one preference alongside others.

Together with dismantling the social security systems, the profitability extremism that spreads through competition ensures that jobs and employment prospects will be precarious. Status anxiety increases. Employees see themselves thrown back on themselves since moderation cannot be expected of businesses and the social systems cushion the consequences of market dynamics far less than in the past.

Responsibility for any deterioration of one’s economic situation is regarded as a matter of self-responsibility. Life becomes a permanent investment in one’s “human capital,” approached as far sighted as possible in order to keep the risk of falling into poverty as low as possible. Education is transformed into human capital formation. The seemingly self-initiated economization of one’s lifestyle is joined to the politically-driven economization of living conditions through privatization and deregulation. Competitiveness becomes the guiding star of all politics.

“Market-conforming democracy” (Angela Merkel) abandons political freedom in favor of an already pre decided goal: the competitiveness of the community degraded to a “location” to invest or to divest. Like a business, the competition state, in order to appropriate global purchasing power, seeks to make itself attractive for capital circulating globally and always ready to leave any less profitable location. Germany succeeds in this to a great extent. Since purchasing power is low in Germany because of “wage moderation” and the developed low-wage sector, purchasing power is sought abroad where unemployment is thereby exported, taking away the income streams which accrued to the workers now dismissed.

The constant balance of payments surpluses mean that foreign countries must become indebted to Germany if they do not want to shrivel. Though income polarization in Germany largely came to a halt around 2005, this is at the expense of foreign countries. Taming and Cushioning Beyond the inconceivable vision of the absence of market interactions, there is only one alternative to the neoliberal program of transforming society into a market society, the alternative of a social market economy. This is a paradigm, not a concrete political program. So there is room for different forms and more or less far reaching programs.

A social market economy is based on two political pillars: (1) taming the market dynamics via regulation and (2) mitigating its consequences in distribution policy. (3) The development and care of an economic culture of moderation and fairness in dealing with one another forms the third, the cultural pillar of taming and civilizing market interactions.

Report this post as:

© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy