Ştefan Sorin Mureşan the Case of Germany
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Ştefan Sorin Mureşan Social Market Economy The Case of Germany Social Market Economy With the kind financial support of: www.Diplomatic-Economist.eu and Dr.-Ing. Mariana Mureșan (b. Popa) (þ) © 2014 Springer Science + Business Media S¸tefan Sorin Mures¸an Social Market Economy The Case of Germany S¸tefan Sorin Mures¸an Bonn, Germany ISBN 978-3-319-09212-6 ISBN 978-3-319-09213-3 (eBook) DOI 10.1007/978-3-319-09213-3 Springer Cham Heidelberg New York Dordrecht London Library of Congress Control Number: 2014953768 © Springer International Publishing Switzerland 2014 This work is subject to copyright. 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Violations are liable to prosecution under the respective Copyright Law. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. While the advice and information in this book are believed to be true and accurate at the date of publication, neither the authors nor the editors nor the publisher can accept any legal responsibility for any errors or omissions that may be made. The publisher makes no warranty, express or implied, with respect to the material contained herein. Printed on acid-free paper Springer is part of Springer Science+Business Media (www.springer.com) Foreword With the English version of Economia Sociala˘ de Piat¸a˘. Modelul German, Sorin Mures¸an is presenting a remarkable book. He analyses the German model of economic policy, which was responsible for a long upswing and recovery of Germany after Second World War. Thus, he discusses the Social Market Economy from an external perspective. The author is doing this in a systematic way: begin- ning with a presentation of the German model in its theoretic features and then comparing it with other theoretic models. This theoretical part is followed by a longer debate of the philosophical foundations of the Social Market Economy model, before the German reality after 1945 is discussed. Lessons from the German model conclude the book. The fact that the German model of economic policy is analysed carefully from abroad is welcome for several reasons. First, it can—not least because of its success especially directly after the economic and monetary reform in 1948—still serve as an example for transformation economies these days. Insofar, the book might become very important for the Romanian economic policy, given that the political will for a sustainable reform policy continues to be strong in the future. Not all actions taken by Ludwig Erhard with respect to the reform in 1948 received political approval, but so did the package. In other words, the importance of the model lies—as Mures¸an has shown—in the consideration of the complexity of economic activity and the interdependency of single elements of the economic order. For this reason, the formulated concept is unique. Second, the time after 1948 until today has shown the danger inherited in such an order: with numerous single interventions that were all well meant and relatively harmless, the economic order can permanently be undermined and the incentive scheme be perverted. In partic- ular the economic and financial crisis inside and outside the Euro area shows how badly designed policy and poorly regulated markets can slowly endanger a whole continent. Having shown this is especially commendable, since it gives economic policy the opportunity to create safeguards against an incremental corruption of an economic order by incorporating the German lessons. Third—and this is important, too—the German economic science as well as the permanent reform debate could gain momentum because of a critical analysis presented by foreign experts. v vi Foreword Although it is naive to believe the lecture of this study would guide the federal government back to a first best policy, at least there is hope that an additional voice that is unsuspicious of partisanship strengthens the arguments for a regulative recall. It is to be hoped that the book is reaching a large international audience and thereby is a contribution to the policy reform debate in Europe. It would also be desirable that the author is using the acquired expertise to join the debate in Germany, too. Jena Andreas Freytag September 2012 Acknowledgements This book attempts to present first of all the roots and structure of the theoretical model of Social Market Economy. Then it looks at principles used in issuing national legislation and institution building, before presenting the stages undergone by the Social Market Economy since its creation in 1948 in Germany and until 2008. Finally, the international context is analysed in which advantages can be drawn from implementing this economic system both by Germany and by a selected number of emerging markets in Eastern Europe, Asia, Africa and South America. There are several friends, colleagues, superiors and institutions I would like to thank for supporting me with this interdisciplinary book. It is actually difficult to say who deserves more and whom to acknowledge here, given the limited space available, since I do not wish to leave out in the English version those who helped me with writing the first version of the book in Romanian in 2003. My first thanks go to my mother Mariana who motivated me and helped with financial resources for the first translation into English of the original version in Romanian of 2003. Then, my thanks go to my wife Ines who brought understanding for my investment of a very large amount of time and resources into completing the English version of this book. I thank Prof. Andreas Freytag of the University of Jena for offering me in the year 2000 while I was a diplomat the opportunity for the initial research at the Institut fu¨r Wirtschaftspolitik der Universita¨tKo¨ln and for keeping in touch over a geographical distance which came about when he moved from Cologne to Jena and I was commuting between Bucures¸ti, Bonn and Brussels. I thank Prof. Gheorghe Popescu for suggesting the topic in the late 1990s as a worthwhile research topic for my PhD as well as for structuring my work into feasible stages. I also thank my friend Dr. Caspar Ju¨rgens for a lot of motivation for continuing to work academically during the years when I moved from diplomatic and political to commercial work. For my scientific formation and overall insights into theology, philosophy, history, economics, politics, foreign policy, diplomacy and international econom- ics, I thank Dr. Ioan Vasile Botiza, Fr. Ken Collins, Fr. Louis McRaye, Dr. Robert Taylor, Dr. Roger McGeehan, Ambassador Sergiu Celac, Dr. Nabil Ayad, Festus Luboyera and Academician Solomon Marcus. vii viii Acknowledgements For insights into the German economic and political system as well as into foreign policy and international economic relations, I thank Prof. Karl-Heinz Hornhues, Klaus Francke, Dr. Friedrich Wu¨nsche, Prof. Gerhard Fels, Dr. Rolf Kroker, Wendula Gra¨fin von Klinckowstroem, Prof. Viktor Vanberg and Prof. Juergen Donges. To Becky Landis thanks are due for having helped me with the native speaker check during long hours of work. I would have liked to include many more relevant pictures, charts and maps, but I had to stop at those already included here. The reason is the large amount of administrative and correspondence work I would have had to deliver in order to receive permission to use them. Nevertheless, several institutions kindly gave permissions in connection with reprints here. For this I would like to thank the Institut der Deutschen Wirtschaft Ko¨ln, Cambridge University Press (Prof. Goodin, Prof. Muffels, Prof. Headey and Dr. Dirven), Stadtarchiv Jena, Jena University, the OECD and the German Bundesanstalt fu¨r Immobilienaufgaben. To the Bibliothek des Deutschen Bundestages, the Bundeszentrale fu¨r politische Bildung and the Hauptbibliothek der Universita¨t Bonn in whose premises I carried out almost all of my research and writing, thanks are also due. Now I invite you to read some of the ideas I believe to be helpful for a mutually respectful coexistence in our common ancient Greek and Roman, Judeo–Christian, European, Mediterranean and Atlantic space. Bucharest Sorin Mures¸an June 2014 Argumentum Why Social Market Economy? First of all, the economic and financial crisis which rocked in 2007–2009 to the bottom the foundations of the Western free markets based economic systems we have in place since Bretton Woods, showed that globalisation brought in the meanwhile results and neoliberalism had reached its limits. In other words the doctrine of “the sky is the limit” reached its own limit. Some call this economic and financial crisis “the first crisis of globalization”.1 It forces us to rethink the whole system in a holistic manner. This system of neoliberal style market economy exported worldwide under the US–UK leadership succeeded indeed to prove successful in bringing the highest level of wealth and to as many people history has ever seen.