The social market economy – a compass for Europe
“Social market economy in the European Union” was the theme of a conference on 27 and 28 May organised by the COMECE Secretariat and the Katholische Sozialwissenschaftliche Zentralstelle (“Catholic Social Sciences Centre”) affiliated with the German Bishops’ Conference. A number of experts presented papers at the conference, and a draft text on the subject of the social market economy in Europe, to be presented to the bishops of COMECE for approval next November, was also discussed.
The conference took place in Mönchengladbach, located half-way between Düsseldorf and the Dutch-German border, and a stronghold of social Catholicism in Germany in the 19th and 20th centuries. Mönchengladbach was the headquarters of the Volksvereine für das katholische Deutschland (The People’s Associations for Catholic Germany), which at their peak, shortly before the First World War, had over 800,000 members. With their work in the field of education and their commitment to social welfare legislation, these associations made a considerable contribution to the development of the concept of the welfare state. This was pointed out to the delegates in the presentation by Professor André Habisch from Eichstätt.
The workers’ associations are the best proof that in a social market economy, balancing state solidarity and a competitive market, it is essential to be mindful of the need to ensure the viable existence of civil society, supported by many different kinds of self-help groups, associations and cooperatives where solidarity can develop freely, amicably and without state compulsion. In the middle of the last century, that was taken for granted. Today this is no longer the case. Hence the plea by Stefano Zamagni, Professor of Economics at the University of Bologna, that today’s social market economy should be understood in terms of a civil economy and that fraternity should be accorded equal status alongside the principles of solidarity and the market. His paper also referred to corresponding passages in the social encyclical Caritas in veritate of Pope Benedict XVI.
A French participant contributed further to the discussion by examining the historical context of the origin of the concept of social market economy. In the 1950s, protectionism dominated trade relations, the financial markets were very small, the top rates of tax were markedly higher than those we have today, and there were fixed exchange rates in the framework of the Bretton Woods Agreement. These factors should be taken into account in re-exploring the meaning of a “social market economy” for the European Union and the reform of the single market. The project of renovating the internal market was also the focus of the second main presentation at the conference. This was given by former MEP Philippe Herzog, who worked towards this central objective of the European Commission as a special adviser alongside Commissioner Michel Barnier (see page 7). Dr Karen Horn from the Institut der deutschen Wirtschaft expressed scepticism in her response to Philippe Herzog. She argued that today the European Union still has no coherent energy policy, harmonisation has fostered egalitarianism, agricultural subsidies distort prices, and the parameters for monetary union have been wrongly set from the start.
Therefore, like many of the other speakers and participants at the conference, she emphasised – in the light of the financial crisis and the debt crisis in some of the Eurozone states – the importance of responsible and virtuous personal conduct for the economic viability of the EU. The fact that cultivation of moral sensibility is an indispensable prerequisite was also underlined in the comments made by Professor Gerhard Kruip from the University of Mainz. Nevertheless, he stated, it is also necessary to have institutional rules of a kind that encourage morally good and proper conduct on the part of enterprises and bankers, consumers and workers alike.
In Europe, these rules are to a large extent made by or coordinated within the European institutions. The impetus of a social market economy, based on the Christian conception of humanity and the principles of Catholic social teaching, can be a compass for this, as Professor Markus Vogt from the University of Munich put it in his summing-up of the conference discussions. After all, following the ratification of the Treaty of Lisbon, a “competitive and social market economy” is now one of the objectives of the European treaties, albeit not the only one.
Translated from the original German