Why was the social market economy such a success story from the 1960s to the 1980s? What changed to make it seem less successful, and what does that teach us about the prospects for more extensive government intervention in the economy in the future?

What will be an ideal response?


Though a “conservative” party, the CDU officially coined the term social market economy and fully developed the model. Christian Democrats generally saw protection of workers as part of their Christian ideology. Granted, the SDP often wanted social spending to expand even more rapidly, but both major parties agreed with the basic premises of the system. The social market economy created a form of capitalism in which close relationships and interpenetration between the private and public sectors have shaped economic and social policies, creating a classic CME. Germany also practiced codetermination, which created an element of democracy within the management of business enterprises, though ultimately businesses are still privately owned and must answer to their stockholders and lenders, as in any other capitalist economy. With reunification and increased globalization, the system took a hit. The future depends heavily on the EU.

Political Science

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