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German Economy
The Germans proudly label their economy a "soziale Marktwirtschaft ,"
or "social market economy," to show that the system as it has developed
after World War II has both a material and a social--or human--dimension.
They stress the importance of the term "market" because after the Nazi
experience they wanted an economy free of state intervention and domination.
The only state role in the new West German economy was to protect the
competitive environment from monopolistic or oligopolistic tendencies--including
its own. The term "social" is stressed because West Germans wanted an
economy that would not only help the wealthy but also care for the workers
and others who might not prove able to cope with the strenuous competitive
demands of a market economy. The term "social" was chosen 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.
Beyond these principles of the social market economy, but linked to it,
comes a more traditional German concept, that of Ordnung, which can be
directly translated to mean order but which really means an economy, society,
and polity that are structured but not dictatorial. The founders of the
social market economy insisted that Denken in Ordnungen --to think in
terms of systems of order--was essential. They also spoke of Ordo-Liberalismus
because the essence of the concept is that this must be a freely chosen
order, not a command order.
Over time, the term "social" in the social market economy began to take
on a life of its own. It moved the West German economy toward an extensive
social welfare system that has become one of the most expensive in the
world. Moreover, the West German federal government and the states (Länder)
began to compensate for irregularities in economic cycles and for shifts
in world production by beginning to shelter and support some sectors and
industries. In an even greater departure from the Erhard tradition, the
government became an instrument for the preservation of existing industries
rather than a force for renewal. In the 1970s, the state assumed an ever
more important role in the economy. During the 1980s, Chancellor Helmut
Kohl tried to reduce that state role, and he succeeded in part, but German
unification again compelled the German government to assume a stronger
role in the economy. Thus, the contradiction between the terms "social"
and "market" has remained an element for debate in Germany.
Given the internal contradiction in its philosophy, the German economy
is both conservative and dynamic. It is conservative in the sense that
it draws on the part of the German tradition that envisages some state
role in the economy and a cautious attitude toward investment and risk-taking.
It is dynamic in the sense that it is directed toward growth--even if
that growth may be slow and steady rather than spectacular. It tries to
combine the virtues of a market system with the virtues of a social welfare
system.
Germany's Thirty Largest Industrial
Firms, 1993
Firm |
Sales (in billions of deutsche marks) |
Employees (in thousands) |
Daimler-Benz |
97.7 |
366.7 |
Siemens |
81.6 |
391.0 |
Volkswagen |
76.6 |
253.0 |
VEBA |
66.3 |
128.3 |
RWE |
55.8 |
118.0 |
Hoechst |
46.0 |
172.5 |
BASF |
43.1 |
112.0 |
Bayer |
41.0 |
151.9 |
Thyssen |
33.5 |
141.0 |
Bosch |
32.5 |
156.6 |
BMW |
29.0 |
71.0 |
Mannesmann |
28.0 |
127.7 |
Metallgesellschaft |
26.1 |
42.6 |
VIAG |
23.7 |
80.7 |
Ruhrkohle |
23.4 |
111.2 |
Preussag |
23.3 |
73.3 |
Adam Opel |
23.0 |
50.8 |
Deutsche Shell |
21.4 |
3.2 |
Ford |
21.2 |
43.8 |
Hoesch-Krupp |
20.5 |
78.4 |
ESSO |
19.4 |
2.4 |
MAN |
19.0 |
57.8 |
Bertelsmann |
17.2 |
50.5 |
Degussa |
14.9 |
32.1 |
Deutsche BP |
14.7 |
2.8 |
Ruhrgas |
14.3 |
11.6 |
Henkel |
14.1 |
40.5 |
IBM Deutschland |
12.6 |
25.0 |
Ph. Holzmann |
12.5 |
43.8 |
Agiv |
10.0 |
42.7 |
- Domestic
Economy and International Economic Relations
- Bundesbank
- The Economic Miracle
- Impact of Unification
on German Economy
- Germany in
the World Economy
- National German Currency
- Culture of German
Management
- Geography (lands and
capitals, climate)
- Society (population, religion,
marriage, urbanization, social structure, immigration)
- Education (elementary,
junior, senior, vocational, higher)
- Economy (the Economic
Miracle, financial system, Bundesbank, business culture)
- Politics (government,
the Chancellor, the President, parties, Bundestag)
- Mass Media (newspapers,
radio and TV)
- Armed Forces (army,
navy, air forces, police)
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