Regarding class warfare and Obaba being a socialist - LOL
The social market economy seeks a middle path between the market economic system of socialism and laissez-faire capitalism (i.e. a mixed economy), combining private enterprise with government regulation 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, by using state intervention.[1] The term "social" was chosen rather than "socialist" to distinguish the social market economy from a system in which the state directed economic activity and/or owned the means of production,[2] which are usually privately-owned in the social market model.
In a social market economy, collective bargaining is often done on a national level not between one corporation and one union, but national employers' organizations and national trade unions.
Important figures in the development of the concept include Franz Oppenheimer, Walter Eucken, Wilhelm Röpke, Alexander Rüstow, Franz Böhm and Alfred Müller-Armack, who originally coined the term Soziale Marktwirtschaft.[3]
[edit] History
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 Christian Democratic Party) and the centre-left (led by the Social Democratic Party).
Southern European states preferred large-scale public services, high salary growth rates and a low unemployment rate over low inflation, low national debt, low public expenditure and other economic health policies.
The term “Social market economy” is still the common economic basis of most political parties in Germany[4][5][6] and a commitment to some form of social market economy was present in the European Union Constitution (a project which was abandoned in 2005 following the negative outcomes of referenda in France and the Netherlands).
[edit] Main Elements
The main elements of the Social Market Economy in Germany are basically:[7]
* The Social Market Economy contains the central elements of the free market economy such as private property, free foreign trade, exchange of goods and free formation of prices.
* Other elements shall diminish occurring problems of the free market economy. These elements, such as pension insurance, health care and unemployment insurance are part of the social security system. The payments to the social security system are mainly made by the labor force. In addition, there are provisions to restrain the free market (e.g. anti-trust code, laws against the abuse of market power etc.).
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