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Climate Change, Digitisation and Globalisation – does the Social Market Economy need Renewal?

by Martin Schebesta

Origins and current challenges

The Social Market Economy has proven to be a stable and successful economic and social order. Yet climate change, digitisation and globalisation pose current challenges. Does the Social Market Economy need renewal? Our Facts & Findings looks at its origins and seeks to answer this question.

April 24, 2020 Ordering Information

In light of current challenges – particularly climate change, digitisation, globalisation and not least the COVID-19 pandemic – the Social Market Economy faces calls for renewal.
The founding fathers of the Social Market Economy – particularly Alfred Müller-Armack – regarded the Social Market Economy as an evolving economic and social order that can and must constantly be adapted to current challenges.
Even though the Social Market Economy could not account for present-day challenges at the time of its initiation, it is possible to derive policy recommenda- tions from its values and principles. Its detailed elabo- ration is part of a societal negotiation process.
The Social Market Economy is capable of addressing economic and societal challenges. A renewal of the Social Market Economy is necessary in the sense of adapting the free regulatory framework – its values and principles are yet timeless.