Social market economy

Social market economy was the peculiar German and Austrian model (pattern) of economy during Cold War era. It is called soziale Marktwirtschaft in German. It is not to be confused with socialist market economy which is the economic model for the People's Republic of China.

Related Topics:
German - Austrian - Model - Pattern - Economy - Cold War - Socialist market economy - People's Republic of China

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Under Konrad Adenauer's administration as chancellor of West Germany (1949-1963), Ludwig Erhard helped create the social market model. It tries to maintain balance among high growth rate, low inflation, low unemployment rate, good work conditions, welfare and public services through state intervention.

Related Topics:
Konrad Adenauer - West Germany - 1949 - 1963 - Ludwig Erhard - Growth rate - Inflation - Unemployment rate - Welfare - Public services - State intervention

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Outside Germany, Article 41 of the Constitution of Italy, approved in 1947, states that "private economic initiative is free" but "the law determines appropriate planning and controls so that public and private economic activity is given direction and coordinated to social objectives", supplying a constitutional basis for a social market economy.

Related Topics:
Constitution of Italy - 1947

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Starting at the 60s social market economy was the main economic model in continental Western Europe, pursued by both centre right (usually led by Christian Democrat parties) and centre left (usually led by Labour, Social Democrat or Socialist parties) administrations.

Related Topics:
Western Europe - Centre right - Christian Democrat - Centre left - Labour - Social Democrat - Socialist

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In Southern Europe states (especially Italy) immense public services, high salary growth rates and low unemployment rate were strongly preferred to low inflation, low national debt, low national expense and others economic health policies. This Services State (roughly for Italian Stato Assistenziale, now derogatory) model of social market is generally considered less succesfull than more thrifty Northern European models.

Related Topics:
Southern Europe - Italy - Public services - Unemployment rate - Inflation - National debt - Italian - Northern European

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Following the fall of Berlin Wall in 9 November 1989 centre right parties gradually espoused neo-liberal economic policies while centre left parties developed the more free-market oriented Third Way. Today the SPD seems to have recovered some social market policies, so as to distinguish itself from the neo-liberal CDU of Angela Merkel in 2005 German federal election.

Related Topics:
Berlin Wall - 9 November - 1989 - Centre right - Neo-liberal - Centre left - Third Way - SPD - CDU - Angela Merkel - 2005 German federal election

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