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

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If a sociopolitical strategy is a serious aim, it is necessary to rethink all other areas of our modern policy on this basis. In social policy, this means, on the one hand, taking the steps required by a social policy directed at all social strata, and, on the other hand, trying to give the individual more self-responsibility in certain areas, at least to some extent, to make sure that social assistance is concentrated on those who really need it. Simply expanding social protection, while overlooking or neglecting the economic changes that have occurred in the meantime, is not an up-to-date solution. I can only briefly touch on this subject here; time constraints prevent me from going into greater detail.

The clear continuation of our competition policies, which in a few years will have to be established on the basis of the Common Market anyway, must be advanced. Here, too, the construction of statically conceived competitive order, such as that upon which the concept of neoliberalism is based, needs to go hand-in-hand with the insight that, in an economy that is dynamically reordering itself – already through the Common Market – the simple principle of insisting on a formal competitive order is not enough. Location changes and shifts in focus, which await essential sectors of our production in the expanding markets of the EEC and in the Atlantic cooperation that is getting under way, cannot be mastered without a certain amount of adaptive intervention. Here, it is a matter of asserting the principle of the free competitive economy, but at the same time giving out temporary start-up assistance and aid adaptation, which need not burden the conscience of the market economists so long as they are moving toward their final goal of a free market.

[ . . . ]

Source: Alfred Müller-Armack, “Das gesellschaftspolitische Leitbild der Sozialen Marktwirtschaft” [“The Sociopolitical Model of the Social Market Economy”], in Bulletin (Press and Information Office of the Federal Government), no. 234, December 19, 1962, pp. 1989-91; no. 235, December 20, 1962, pp. 1997-99; and no. 236, December 21, 1962, pp. 2003-04.

Translation: Allison Brown

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