Economic growth and prosperity for all – the social market economy has proved to be a model for success in Germany. This is how the system works.
According to the German Federal Ministry for Economic Affairs, “the social market economy is the foundation of our liberal, open and democratic society. The main idea behind the social market economy is to protect the freedom of the economy and functioning competition, and at the same to foster prosperity and social security in our country.”
Ludwig Erhard, the first German Federal Minister for Economic Affairs (1949 to 1963) under Federal Chancellor Konrad Adenauer, is seen as the father of the social market economy. As Director of the Economic Administration of the “Combined Economic Area” he in 1948 declared the end of the controlled economy, against opposition from the occupying powers.
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