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1 Optimum. Studia Ekonomiczne

1 2011

1 Kania L.

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SOCIAL MARKET ECONOMY AND THE PRESENT-DAY CHALLENGES (Koncepcja spolecznej gospodarki rynkowej a wyzwania wspolczesnosci)

100%

Kania L.

nr 4(52)

63-78

Social market economy, notably advocated by the then Minister of Economy and Chancellor of the Federal Republic of Germany, Ludwig Erhard, postulates that socio-economic order should be based on free and responsible competition, with the help of shrewd and long-term state institutional policy. The conception assumes that an economy, being a subsystem of society, is responsible for producing the material foundations necessary for a society to exist and prosper. In Erhard's own words, an economic system should ensure 'prosperity for all'. Whereas free and - which he particularly emphasised - responsible competition is a means to this end. Not only does it discipline entrepreneurs, but also unleashes the creative potential of individuals. However, freedom which is not accompanied by the awareness of the consequences of one's choices, or willingness to accept those consequences, easily degenerates into license and excess. Therefore, economy is closely related to ethics, of which Erhard and other representatives of the ordoliberal school were only too aware. Free and responsible competition does not only result from ethical principles, but is also an effect of proper state institutional policies, founded on a long-term vision of economic development and a monetary policy which attempts to achieve and maintain price stability. Social market economy proposes a socio-economic system based on: competition, freedom, strong ethical standards and wise state policy leading to a stable social and economic order. The concept can then become a valuable source of inspiration for contemporary politicians and scientists, who face the challenges of today's constantly changing and unpredictable world.