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Principles of the "Social Market Economy" (December 19, 1962)

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In discussions within our own circles and among the wider German public, we must proceed from the fact that the Social Market Economy, after a phrase in which it expressed itself in the economic reconstruction of our country, in an undreamt-of push in the direction of a higher standard of living, and in the improvement of social conditions, is now entering into a second phase, in which it must continue everything that has been started, but also give a new accent to everything. It is my conviction that we should try, with careful intellectual preparation, to embark upon a second phase of the Social Market Economy, in which the sociopolitical task should be given emphasis, insofar as the economic problems seem to be solved or solvable in the growth of the coming years.

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If we correctly analyze the factors of our present situation, it seems to me that as the Social Market Economy enters into its second phase we will not be able to avoid viewing it more comprehensively in a sociopolitical sense. This has nothing to do with a personal craving for innovation; rather it stems from the observation that past motivations, in particular overcoming shortages and pure growth, are losing their significance. Our very success makes much of what has been achieved seem self-evident. The centrifugal forces in our society are clearly gaining strength in our situation of prosperity, and they are calling for additional efforts to integrate our social system. The democratization of consumer options and the concurrence of the basic interests of almost all groups with overall growth, as experience shows us, offer a basis upon which such policies can be pursued. I have pointed out the practical problems of such social policy in my article “Social Market Economy, Part II.” I need to refer to this here. In August of last year, the economic policy committee of the CDU published thirty-six theses on economic and social policy, which seek to make more specific statements along the lines of this idea. It is important, however, not to let the idea of a fundamentally new order for our Social Market Economy get lost in the details at the very beginning. Details are important, but at the beginning the basic intellectual decision must be made as to whether we want to act with a view to establishing a harmonious structure for our society, or whether economic policy will seek its cure in amending laws and day-to-day politics.

I am not demanding that we shift the emphasis to general sociopolitical measures and thereby assign less significance to economic policy. Any economic policy conducted under the rubric of an economic system will at the same time invariably be a social policy. I need only refer to monetary policy here. Currency stability is an excellent means of creating stability in our society. Creeping inflation will cast new doubts on all efforts to create wealth, if, through currency depreciation, a mostly invisible but undeniable decrease in wealth counteracts it.

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