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Freedom with ResponsibilityThe Social Market Economy in Germany 1918-1963$
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A. J. Nicholls

Print publication date: 2000

Print ISBN-13: 9780198208525

Published to Oxford Scholarship Online: October 2011

DOI: 10.1093/acprof:oso/9780198208525.001.0001

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Neo-liberalism in the Immediate Post-war Period

Neo-liberalism in the Immediate Post-war Period

(p.136) 6 Neo-liberalism in the Immediate Post-war Period
Freedom with Responsibility

A. J. Nicholls

Oxford University Press

This chapter takes an account of the efforts to establish neo-liberalism in post-war Germany. Businessmen set up a branch of the old German Democratic Party in Munster and contacted Miiller-Armack to discuss efforts needed to stabilize the currency crisis. He stressed that without a free-price mechanism it was impossible to make rational decisions about the allocation of resources. Müller-Armack developed his concept of the social market economy and in May 1948, he presented a blueprint, outlining its objectives and the means by which it could be achieved. The collapsing system of government controls needed to be replaced by the free market. Consumer choice would have the power to establish real prices and encourage production. Social security should be achieved and workers needed to be given ‘social right to participate’ in the organization of their work (ein soziales Mitgestaltungsrecht), without, reducing managerial initiative and the responsibility of the employer. Monopolies needed to be resisted to prevent the abuse of economic power. The Wangeroog programme emphasized preventing the abuse of property and opposing monopolies, but specifically provided for market-regulation agreements, and claimed that a general ban on such agreements was ‘untenable for economic reasons’.

Keywords:   neo-liberalism, currency crisis, social market economy, free market, consumer choice, Wangeroog programme, market-regulation agreements, Miiller-Armack

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