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social market economy : ウィキペディア英語版
social market economy

The social market economy ((ドイツ語:Soziale Marktwirtschaft)) is a social and economic system combining free market capitalism which supports private enterprise, alongside social policies which establish both fair competition within the market and a welfare state.〔''Social Market'', Economics Dictionary on Economist.com: http://www.economist.com/economics-a-to-z/s#node-21529660〕〔http://www.kasyp.net/fileadmin/kasyp_files/Documents/reused/Social_Market_Economy/Wrobel-_Social_market_economy_1_.pdf〕 It is sometimes classified as a coordinated market economy. The social market economy was originally promoted and implemented in West Germany by the Christian Democratic Union (CDU) under Chancellor Konrad Adenauer in 1949. Its origins can be traced to the interwar Freiburg school of economic thought.
The social market economy was designed to be a third way between ''laissez-faire'' economic liberalism and socialist economics. It was strongly inspired by ordoliberalism, social democratic ideas, and the tradition of Catholic social teaching or, more generally, Christian ethics.
The social market economy refrains from attempts to plan and guide production, the workforce, or sales, but it does support planned efforts to influence the economy through the organic means of a comprehensive economic policy coupled with flexible adaptation to market studies. Effectively combining monetary, credit, trade, tax, customs, investment, and social policies, as well as other measures, this type of economic policy creates an economy that serves the welfare and needs of the entire population, thereby fulfilling its ultimate goal.〔http://germanhistorydocs.ghi-dc.org/docpage.cfm?docpage_id=3415〕
The 'social' segment is often wrongly confused with socialism and democratic socialism, though aspects were inspired by both models. Social market economics rejects the socialist idea that states can replace markets. Socially the model supports the provision of equal opportunity and protection of those unable to enter the free market labor force, for example because of old-age, disability or unemployment.〔http://www.kas.de/upload/dokumente/2010/06/60_Years_SME/marktanner.pdf〕
Some authors use the term social capitalism with roughly the same meaning as social market economy. It is also called Rhine capitalism, typically when contrasting it with the Anglo-Saxon model of capitalism. Rather than see it as an antithesis, some authors describe Rhine capitalism as successful synthesis of the Anglo-American model with social democracy. The German model is also contrasted and compared with other economic models, some of which are also described as "third ways" or regional forms of capitalism, including Tony Blair's Third Way, French dirigisme, the Dutch polder model, the Nordic model, Japanese corporate capitalism and the contemporary Chinese model. A 2012 comparative politics textbook distinguishes however between the "conservative-corporatist welfare state" (arising from the German social market economy) and the "labor-led social democratic welfare state".
Social capitalism as a theory or political or philosophical stance, challenges the idea that the capitalist system is inherently antagonistic to social goals or to a political economy characterized by greater economic equality.〔 The essence of the social market economy is the view that private markets are the most effective allocation mechanism, but that output is maximized through sound state macroeconomic management of the economy. Social market economies posit that a strong social support network for the less affluent enhances capital output. By decreasing poverty and broadening prosperity to a large middle class, capital market participation is enlarged. Social market economies also posit that government regulation, and even sponsorship of markets, can lead to superior economic outcomes, as evidenced in government sponsorship of the Internet or basic securities regulation.
==Model==

Social market economies aim to combine free initiative and social progress on the basis of a competitive economy.〔
Müller-Armack, A., Soziale Marktwirtschaft - Handwörterbuch der Sozialwissenschaften, vol. 9, Göttingen, 1956, p. 249.〕 The social market economy is opposed to ''laissez-faire'' policies and to socialist economic systems〔
James C. Van Hook, Rebuilding Germany: The Creation of the Social Market Economy 1945-1957, Cambridge University Press, 2004, ISBN 0-521-83362-0, p. 185〕 and combines private enterprise with regulation and state intervention to establish fair competition, maintaining a balance between a high rate of economic growth, low inflation, low levels of unemployment, good working conditions, social welfare, and public services.〔
Gabler Wirtschaftslexikon: (Social market economy )
〕 The term "social" was established by Adenauer to prevent further reference to "christian Socialism",〔 p. 80〕 which was used in the early party agenda "Ahlener Programm" in 1947.〔 p. 53〕
Although the social market economy model evolved from ordo-liberalism, this concept was not identical with the conception of the Freiburg School as it emphasized the state's responsibility actively to improve the market condition and simultaneously to pursue a social balance. In contrast to Walter Eucken, who sought an answer to the social question by establishing a functioning competitive order within a constitutional framework, Müller-Armack conceived the social market economy as a regulatory policy idea aiming to combine free enterprise with a social programme that is underpinned by market economic performance.〔
Müller-Armack, A., ''Soziale Marktwirtschaft – Handwörterbuch der Sozialwissenschaften'', vol. 9, Göttingen, 1956, p. 390; Idem, Wirtschaftsordnung und Wirtschaftspolitik, Studien und Konzepte zur Sozialen Marktwirtschaft und zur Europäischen Integration, Freiburg im Breisgau, 1966, p. 245.
〕 In putting social policy on par with economic policy, Müller-Armack’s concept was more emphatic regarding socio-political aims than the ordo-liberal economic concept. This dual principle also appeared in the name of the model. Although the adjective "social" often attracted criticism as a decorative fig leaf or conversely, as a gateway for antiliberal interventionism,〔
Hayek, F. A. v., "Was ist und was heisst 'sozial'?", in: Hunold, A. (ed.), ''Masse und Demokratie'', Erlenbach-Zurich/ Stuttgart, 1957, pp. 71 ff. See also the contributions of Wünsche, H. F., Welcher Marktwirtschaft gebührt das Beiwort „sozial“? and Wartin, C., Zur sozialen Dimension marktwirtschaftlicher Ordnungen, in: Hohmann, K.; Schönwitz, D.; Weber, H. J.; Wünsche, H. F. (eds.), Grundtexte zur Sozialen Marktwirtschaft, Band 2, Das Soziale in der Sozialen Marktwirtschaft, Stuttgart/New York, 1988, pp. 21-31, and pp. 411-415.
〕 it meant more than simply distinguishing the concept from that of ''laissez-faire'' capitalism on the one side and of ordo-liberal conceptions on the other.〔
Nicholls, A. J., The Bonn Republic – West German Democracy 1945-1990, London/ New York, 1997, pp. 59 ff.
〕 In drawing on Wilhelm Röpke's anthropo-sociological approach of an economic humanism leading to a ''Civitas Humana'',〔
Röpke, W., Civitas Humana - Grundfragen der Gesellschafts- und Wirtschaftsordnung, Erlenbach-Zürich, 1944.
〕 Müller-Armack pursued a "Social Humanism" or "Social Irenics" – the notion "irenics" derives from the Greek word ''εἰρήνη ''(eirēnē), which means being conducive to or working toward peace, moderation or conciliation – to overcome existing differences in society. Therefore, the Social Market Economy as an extension of neo-liberal thought was not a defined economic order, but a holistic conception pursuing a complete humanistic societal order as a synthesis of seemingly conflicting objectives, namely economic freedom and social security.〔Müller-Armack, A., Auf dem Weg nach Europa. Erinnerungen und Ausblicke, Tübingen/ Stuttgart, 1971, pp. 50 ff.〕 This socio-economic imperative actively managed by a strong state – in contrast to the ordo-liberal minimal state solely safeguarding the economic order〔
In regard to the different conceptions of the state see the study Lange-von Kulessa, J.; Renner, A., Die Soziale Marktwirtschaft Alfred Müller-Armacks und der Ordoliberalismus der Freiburger Schule – Zur Unvereinbarkeit zweier Staatsauffassungen, in: ORDO 49, Stuttgart, 1998, pp. 79-104.
〕 – is often labelled by the ambiguous but historical term "''Der Dritte Weg''" (The Third Way).
The concept of the social market economy received fundamental impulses from reflection and critique of historical economic and social orders, namely Smithian ''laissez-faire'' liberalism on the one hand and Marxian socialism on the other. Furthermore, various "Third Way" conceptions prepared the ground for the socio-economic concept. Already in the late nineteenth century, the ''Kathedersozialisten'' (Catheder Socialists), engaged in social reforms in the ''Verein für Socialpolitik'', turning away from pure liberalism to demand a purposive state policy designed to regulate economic life and advocating a middle course between anarchic individualism, traditionalistic corporatism and bureaucratic etatism.〔
Nipperdey, Th., Deutsche Geschichte 1866-1918. Erster Band: Arbeitswelt und Bürgergeist, Munich 1993, p. 336.
〕 In the early twentieth century, the Frankfurt sociologist and economist Franz Oppenheimer postulated a so-called "Liberal Socialism", i.e. socialism achieved via liberalism, as the pursuit of a societal order, in which economic self-interest preserves its power and persists in free competition.〔
Oppenheimer, F., System der Soziologie (III/1). Band 3: Theorie der reinen und politischen Ökonomie, Teil 1: Grundlagen, Jena, 1910, p. 9. The economist Franz Oppenheimer (1864-1943) also published his economic conception in ''Sprung über ein Jahrhundert'', Bern/ Leipzig, 1935 under the pseudonym F. D. Pelton.

This desirable order of freedom and equality was labelled by a later programmatic publication entitled ''Weder so - noch so. Der dritte Weg'' (thus, not thus. The third way ).〔
Oppenheimer, F., Weder so – noch so. Der dritte Weg, Potsdam, 1933.

This position was widely shared by Oppenheimer's doctoral student and friend, Ludwig Erhard;〔
Oppenheimer supervised Erhard’s doctoral thesis titled ‘Wesen und Inhalt der Werteinheit’, namely a study on various historical schools’ perception of character and content of value, in the years 1922 to 1925.〕 although the latter displaced adjective and subject by promoting a ‘Social Liberalism’〔Erhard, L., Franz Oppenheimer, dem Lehrer und Freund (1964), in: Hohmann, K. (ed.), Ludwig Erhard. Gedanken aus fünf Jahrzehnten, Reden und Schriften, Düsseldorf/ Vienna/ New York, 1988b, p. 861.〕 and never liked the expression ‘Third Way’.〔Regarding the influence of Oppenheimer on Erhard, see Wünsche, H. F., Der Einfluss Oppenheimers auf Erhard und dessen Konzeption von der Sozialen Marktwirtschaft, in: Caspari, V.; Schefold, B. (eds.), Franz Oppenheimer und Adolph Lowe, Zwei Wirtschaftswissenschaftler der Frankfurter Universität, Marburg, 1996, pp. 141-161; Haselbach, D., Franz Oppenheimer’s Theory of Capitalism and of a Third Path, in: Koslowski, P. (ed.), The Theory of Capitalism in the German Economic Tradition. Historism, Ordo-Liberalism, Critical Theory, Solidarism, Berlin et al., 2000, pp. 54-86.〕 In his opinion the term was tainted, reminding him too much about ideas of a mixed economy, somewhere between a market economy and central planning. He vehemently and consistently argued against the view that models were converging.〔Erhard, L., Wirtschaft und Bildung (17 Aug 1957), reprinted in: Hohmann, K. (ed.), l.c., 1988b, p. 515.〕
Further, in contrast to Müller-Armack who emphasised the social aspect, for Erhard the Social Market Economy was always first and foremost a market economic system.〔Comparative study Goldschmidt, N., Alfred Müller-Armack and Ludwig Erhard: Social Market Liberalism, in: CREPHE-CREA Histoire du Liberalisme en Europe, Brochure no. 21, Paris, 2004.〕 By proclaiming ‘the freer an economy is, the more social it is,’〔Erhard, L., Wirken und Reden, Ludwigsburg, 1966, p. 320.〕 Erhard once told Friedrich Hayek that the free market economy did not need to be made social but was social in its origin.〔F. A. Hayek, ''The Fatal Conceit: The Errors of Socialism'' (University of Chicago Press, 1991), p. 117.〕 Ludwig Erhard was rather inclined to Walter Eucken’s ordoliberal competitive market order. Although he even considered himself an ordoliberal,〔Erhard, L., Deutsche Wirtschaftspolitik - Der Weg der Sozialen Marktwirtschaft, Düsseldorf/Vienna/New York/Moscow, 1992 (originally published in 1962), p. 592.〕 Erhard based his economic conception neither on Eucken nor on Müller-Armack. In fact, his doctoral supervisor Franz Oppenheimer and especially Wilhelm Röpke, like Erhard a student of Oppenheimer, was his source of inspiration.〔Nicholls, A. J., l.c., 1994〕 Erhard perceived Röpke’s books as works of revelation and considered the economist a brother in spirit.〔Hentschel, V., Ludwig Erhard - Ein Politikerleben, Berlin, 1998, pp. 75-78.〕 On 17 August 1948, however, Erhard referred to Müller-Armack by whom he was strongly impressed most of all not as a theorist, but instead as one who wanted to transfer theory into practice,〔Hentschel, V., Ludwig Erhard - Ein Politikerleben, Berlin, 1998, p. 25.〕 and his concept of the Social Market Economy. Soon after, at the second party congress of the Christlich-Demokratische Union (Christian Democratic Union) (CDU) in the British zone in Recklinghausen on 28 August 1948, Erhard circumscribed the concept as a ‘socially committed market economy’.〔Erhard, L., Marktwirtschaft im Streit der Meinungen, printed in: Erhard, L., Deutsche Wirtschaftspolitik – Der Weg der Sozialen Marktwirtschaft, Düsseldorf/ Vienna/ New York/ Moscow, 1992, p. 70. Finally, Erhard used and described the term in an article in the Berliner Tagesspiegel on 23 April 1949.〕 Whereas most neo-liberal economists viewed the concept not only as an economic path between the Scylla of an untamed pure ''laissez-faire'' capitalism and the Charybdis of a collectivist planned economy, but also as a holistic and democratic social order, Erhard and in particular Müller-Armack, however, emphasised public acceptance and civic engagement as prerequisites for the success of the socio-economic model.〔Müller-Armack, A., The Social Market Economy as an Economic and Social Order, in: Review of Social Economy 36, Washington, D.C., 1978, pp. 326 f.〕 For instance, Müller-Armack stressed that by ‘more socialism’ he meant the social engagement ''for'' and ''with'' the people.〔Müller-Armack, A., Religion und Wirtschaft, Bern/ Stuttgart, 1950, pp. 559 ff.〕 Equally, Ludwig Erhard pointed out that the principles of the Social Market Economy could only be achieved if the public was determined to give them priority.〔Erhard, L., Wohlstand für alle, Gütersloh, 1963, p. 11.〕
Important figures in the development of the concept include Walter Eucken, Wilhelm Röpke, Alexander Rüstow, Franz Böhm, Franz Oppenheimer, Constantin von Dietze and Alfred Müller-Armack, who originally coined the term ''Soziale Marktwirtschaft''.
They share an involvement in the Anti-Nazi Opposition, whose search for a post-nazi order for Germany is an important background for the development of this concept. Early protagonists had close contacts to the oppositional church-movement "Bekennende Kirche" and Dietrich Bonhoeffer and emphasized the reference of their concept to Catholic and Protestant social ethics.〔Christine Blumenthal-Lampe: Das wirtschaftspolitische Programm der Freiburger Kreise: Entwurf einer freiheitlich-sozialen Nachkriegswirtschaft, Berlin 1973; Harald Jung: Soziale Marktwirtschaft und weltliche Ordnung, Berlin 2009.〕

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