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Social Market Economy and Christian Social Thought

Social Market Economy and Christian Social Thought. Prof. Dr. Andr é Habisch Faculty of Business and Economics Catholic University of Eichstätt-Ingolstadt. Germany 1945. Germany 1945. A totalitarian, racist and criminal Government had brought about the deepest crisis in German history

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Social Market Economy and Christian Social Thought

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  1. Social Market Economy and Christian Social Thought Prof. Dr. André Habisch Faculty of Business and Economics Catholic University of Eichstätt-Ingolstadt

  2. Germany 1945

  3. Germany 1945 • A totalitarian, racist and criminal Government had brought about the deepest crisis in German history • European countries assaulted and humiliated with more than 40 Mio. dead; • Holocaust as one of the worst crimes in Human history; • More than 8 Mio. German soldiers and civilians dead; • Germany destroyed, occupied and divided; millions of refugees from the eastern parts now Polish or Russian What kind of future would you predict for this country?

  4. Economicprosperity of Germany 1950-2008: GDP per capital After 1948, Germany became one of the most successful economies – with 6 decades of continuous economic prosperity

  5. Whathappened? • The crisis of the war helped politicians to overcome a constant plague of German history: confessional divisions • Overcoming divisions allowed Christian politicians to effectively influence crafting institutions in Western Germany (FRG) • Konrad Adenauer as first head of Government (1949-1962) was a former local politician from the Catholic ‚Center‘ party • Catholic Social thought served as a ‚hidden State religion‘ – but complemented and enriched by Protestant Freiburg School • The principles of Personal Dignity, Common Good, Solidarity and Subsidiarity strongly influenced the emerging institutional system of the post-war German institutional system of ‘SozialeMarktwirtschaft’

  6. Christian values in the German Political and Economicsystem:Personal dignity • ... expressed by the general declaration of Human rights in the constitution. • ... an independent constitutional court, to which citizens can appeal if their Human rights are violated • ... A market economy, which assures freedom of entrepreneurial initiative and independence from any political or private power • Family owned private enterprises as back-bone of German economy: Mittelstand values like thriftiness, engagement, care for employees and local community (educational issues, Sport) prevail (investment in social capital and trust!)

  7. Christian values in the German Political and Economicsystem:Subsidiarity • Independently elected municipalities and federal States with autonomous budgets and decision rights; • Autonomous collective bargaining of employer associations and trade unions: labour system is organized independently from Government (Practical wisdom of professional business and Union representatives instead of Government officials!) • Professional education (‘dual system’) as public-private partnership: half week professional school (public) – half week apprentice in business (private), business representatives as co-examiners • A welfare system which integrates major civil society groups (churches, labour movement, Red Cross, local initiatives) in order to recruit voluntary engagement for health care, child and elderly care etc.

  8. Christian values in the German Political and Economicsystem:Solidarity • Gratuitous access to well organized public educational system (elementary school – universities: admission depends on educational achievement) • Welfare system with public health care, unemployment insurance, public pension system linked to employment • Public labour agency in charge of placement service and security payments – joint administration of employer associations and trade unions • Welfare payments on a communal level

  9. Christian values in the German Political and Economicsystem:Common Good • Obligatory membership in chambers of commerce: prerequisite for self regulation of business enterprises, chamber associations support Mittelstand companies • Effective public Anti-trust system with specialised agency and arbitration board • Specialized three-stage labour courts • Worker’s councils with certain co-responsibilities in HR issues => structural integration of business into ‘corporatist’ institutions keeps responsibilities co-present in business’ mindset!

  10. Conclusion • After the total destruction of WW II values from the Christian tradition inspired the emergence of ‚SozialeMarktwirtschaft‘ • Personal dignity and self-responsibility, Common-Good orientation, solidarity in subsidiary structures prevail • The German economy (‘Rhenish capitalism’) is therefore very different from the Anglo-saxon liberal model (copied by China) • Government is supposed to provide an institutional frame-work (‘Rahmenordnung’) for business but should refrain from political interventions • Sustainable growth and relatively high standard of living prevailed

  11. Social Market Economy and Christian Social Thought Thankyouforyourattention! Prof. Dr. André Habisch Faculty of Business and Economics Catholic University of Eichstätt-Ingolstadt

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