History of Economic Thought. Basic provisions of the theory of social market economy (SRH) (the most important)

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History of Economic Thought. Basic provisions of the theory of social market economy (SRH) (the most important)

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79. MAIN PROVISIONS OF THE THEORY OF SOCIAL MARKET ECONOMY (SRH)

The concept of SRS was put into practice in West Germany in 1940. A significant contribution to the development and practical implementation of this model was made by Ludwig Erhard, Alfred Müller-Armac, Wilhelm Repke and others. Walter Eucken, considered the spiritual father of the "social market economy" and the most significant German economist of this century.

At its core, SRS is a specific version of the liberal model of the "free market economy" with its inherent features:

1) guaranteeing individual freedoms and private property rights;

2) decentralization of economic decisions;

3) free pricing and free competition;

4) openness of the internal market to the outside.

The main distinguishing features of the social market economy as the theoretical basis of the socio-economic program:

1) special role of the state. In contrast to classical liberalism, the founders of the concept of “social market economy” did not envisage the self-elimination of the state in matters of economic and social policy. According to Eucken, the economic order is not established on its own, is not imposed by economic reality itself. The state must be able to establish this economic order. At the same time, the activities of the state should be aimed exclusively at creating forms of economic order, and not at regulating the economic process;

2) special social policy.

L. Erhard's views on social policy:

a) the market system allows a person to take the initiative, to liberate creative energy. Sociality is inherent in the market in the sense that it is characterized by competitiveness, which ensures economic progress and allows mainly the consumer, that is, the whole people, to enjoy the benefits of higher labor productivity;

b) the effectiveness of the social policy of the state is not determined by the amount of social charity and redistribution. Most of the income should remain in the hands of the recipients, and not withdrawn in the form of taxes for social needs;

c) the state must guarantee everyone the opportunity to get an education, a profession, the opportunity to save money, having gained independence from "social guardianship";

d) as the wealth of society and the living standards of its citizens grow, the need for a system of social welfare will disappear. The state should help only the poor who cannot secure a living wage;

3) competition - the most important element of the social market economy.

Oyken was deeply convinced that only such an economy based on competition would ensure the freedom and dignity of a person, although in reality pure, perfect competition is unattainable. The development of competition requires certain institutional prerequisites. These prerequisites are supported by combating monopoly, promoting small and medium-sized businesses, creating conditions for each person to display their abilities and creative potentials.

Author: Tatarnikov E.A.

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