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Facts and Findings

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.

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  • 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.

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Martin Schebesta

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