Germany's Market-Social Economy

INTRODUCTION Germany established a market-social economy following World War II in the 1950s (Webb, 2014). The market-social economy concept “has on the one hand a basic free-trade orientation and on the other hand some ‘social’ percepts that modify the outcome of the market process by redistributive and social security measures …” (Witt, 2002, para 2). More specifically, “the term market” reflects the desire for a marketplace free of government influence with exception to protection of competition (“Germany economic”, 2013, para. 8). And “the term social” emphasizes the desire for an economic system that not only supports the rich, but also supports the rest of society through redistribution (“Germany economic”, 2013, para. 9). “The term ‘social’ was chosen [by the Germans] rather than ‘socialist’ to distinguish their system from those in which the state claimed the right to direct the economy or to intervene in it” (“Germany economic”, 2013, para. 9). Today, Germany’s economy is doing quite well, positioned as the sixth largest economy in the world with a Gross Domestic Product (GDP) of “$3.841 trillion” (Amadeo, 2016, para. 1). Germany “is a leading exporter of machinery, vehicles, chemicals, and household equipment and benefits from a highly skilled labor force” (“Germany economy”, 2016, para. 1). The industry sector …show more content…
The reform made firing employees easier with the end of goal of making hiring easier (Zhong, 2012, para 8). The 2010 Agenda also made rules associated with letting employees go for economic reasons, less restrictive, so that employers could avoid lawsuits (Zhong, 2012, para. 8). The 2010 Agenda “has been credited with insulating Germany against the … [2008 global recession]” (Zhong, 2012, para. 2) and established a platform for Germany to balance its budget in