So as much market as possible, as much state as necessary – this basic idea of the social market economy is apparently not particularly well anchored in the minds of Germans. This is the result of a representative survey by the new Ifo-Ludwig-Erhard Center for Social Market Economy in Fürth.
Instead of seeing the free market-economy pillar of the concept as a prerequisite for social balance through the state, the majority of Germans therefore consider both components in isolation – with an emphasis on the social aspect.
“While 49 percent of those surveyed think of fairness, distribution and social security when they hear the term, 34 percent associate it with market-based processes,” says the study. Just under a quarter of those surveyed associate both social and economic aspects with the social market economy.
Older people depend more on the social market economy
The authors consider this view of the concept, which enjoys a high reputation overall, to be problematic. Because depending on the terms with which citizens associate their economic system, their expectations could be met or missed by political measures. “If these expectations are not systematically met by politicians, for example because politicians have a different association with the order of the social market economy, public approval of the system as a whole decreases,” write the authors.
The head of the Ifo Center, Sarah Necker, says: “This tunnel vision of the social market economy can explain many political decisions that strive for a stronger welfare state and ignore the effects on the economy, such as raising the minimum wage to 12 Euro.”
What is striking in the survey, which was conducted in late summer, is that older respondents have internalized the original idea of the social market economy to a greater extent, they more frequently associate both aspects with the concept.