The modern state exerts a constant influence on the economy through its policies on taxation, finance, currency and credits, customs, trade, social services, prices and public contracts as well as agriculture and housing. More than a third of the national income passes through the hands of the government. The question is therefore not whether measures of economic planning and control serve a purpose, but rather who should apply these measures and for whose benefit. The state cannot shirk its responsibility for the course the economy takes. It is responsible for securing a forward-looking policy with regard to business cycles and should restrict itself to influencing the economy mainly by indirect means.
Free choice of consumer goods and services, free choice of working place, freedom for employers to exercise their initiative as well as free competition are essential conditions of a Social Democratic economic policy. The autonomy of trade unions and employers’ associations in collective bargaining is an important feature of a free society. Totalitarian control of the economy destroys freedom. The Social Democratic Party therefore favours a free market wherever free competition really exists. Where a market is dominated by individuals or groups, however, all manner of steps must be taken to protect freedom in the economic sphere. As much competition as possible – as much planning as necessary.
Ownership and Power
A significant feature of the modern economy is the constantly increasing tendency toward concentration. Large-scale enterprises exert a decisive influence not only on the development of the economy and the standard of living but also on the structure of the economy and of society. Those who control large industrial concerns, huge financial resources and tens of thousands of employees do not merely perform an economic function but wield decisive power over men; wage and salary earners are kept in a position of dependence, and not only in purely economic and material matters.
Wherever large-scale enterprises predominate, free competition is eliminated. Those who have less power have fewer opportunities for development, and remain more or less fettered. The consumer occupies the most vulnerable position of all in the economy.
Increased power through cartels and associations gives the leaders of big business an influence on politics and the state which is irreconcilable with democratic principles. They usurp the authority of the state. Economic power becomes political power.
This development is a challenge to all who consider freedom, justice, human dignity and social security the foundations of human society.
The key task of an economic policy concerned with freedom is therefore to contain the power of big business. State and society must not be allowed to become the prey of powerful sectional groups.
Private ownership of the means of production can claim protection by society as long as it does not hinder the establishment of social justice. Efficient small and medium sized enterprises are to be strengthened to enable them to prevail in competition with large-scale enterprises.
Competition by public enterprise is an important means of preventing private enterprise from dominating the market. Public enterprise should safeguard the interests of the community as a whole. It becomes a necessity where, for natural or technical reasons, economic functions vital to the community cannot be carried out in a rational way except by excluding competition.
Enterprises which are built up on a voluntary collective basis and whose purpose it is to satisfy demand rather than earn private profits help to regulate prices and serve the interests of the consumer. They perform a valuable function in a democratic society and should be supported.
Large-scale publicity should give the people an insight into the power structure of the economy and into business practices in order that public opinion may be mobilised against abuses of power.
Effective public control must prevent the abuse of economic power. The most important means to this end are investment control and control over the forces dominating the market.
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