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The CDU and the "Social Market Economy": Düsseldorf Guidelines for Economic Policy, Agricultural Policy, Social Policy, and Housing (July 15, 1949)

By 1949, the idea of Christian Socialism had clearly lost influence within the CDU. In its stead, Konrad Adenauer, the chairman of the CDU in the British zone, advocated the “social market economy,” a concept proposed by CDU politician and economic expert Ludwig Erhard. The “social market economy” differed from both the Socialist planned economy in the Eastern zone and the liberal-capitalist economic system. The CDU’s Düsseldorf Guidelines of July 15, 1949, reflected the basic principles of the concept. At its core stood the linkage of the private sector’s performance principle with an active state economic policy that included numerous instruments of regulation and control.

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After the war, the economic and social life of the German people moved closer and closer to a state of utter dissolution.

The turnaround came on June 20, 1948. The currency reform alone did not bring it about, but it did create the proper technical preconditions. The most essential impulse came from the implementation of market economic principles. On June 20, 1948, the “social market economy” espoused by the CDU made these principles the foundation of German economic policy.

What does the CDU mean by social market economy?

The “social market economy” is the socially anchored law for the industrial economy, according to which the achievements of free and able individuals are integrated into a system that produces the highest level of economic benefit and social justice for all. This system is created by freedom and responsibility, which find expression in the “social market economy” through genuine performance-based competition and the independent control of monopolies. Genuine performance-based competition exists when the rules of competition ensure that, under conditions of fair competition and equal opportunity, the better performance is rewarded. Market-driven prices regulate the interaction between all market participants.

The social market economy stands in marked contrast to the command economy, which we reject, regardless of whether its guiding agencies are organized in a centralized or decentralized fashion, are part of the state, or are autonomous.

However, the “social market economy” also stands in stark contrast to the so-called free enterprise economy of liberal hue. To avoid a relapse into the “free enterprise economy,” monopolies must be independently controlled in order to ensure performance-based competition. After all, just as the state or semi-public agencies must not guide the industrial economy and individual markets, private persons and private associations must not assume such guiding functions, either. The social market economy refrains from attempts to plan and guide production, the workforce, or sales, but it does support planned efforts to influence the economy through the organic means of a comprehensive economic policy coupled with flexible adaptation to market studies. Effectively combining monetary, credit, trade, customs, tax, investment, and social policies, as well as other measures, this type of economic policy creates an economy that serves the welfare and needs of the entire population, thereby fulfilling its ultimate goal. Naturally, it must also adequately meet the needs of those parts of the population suffering hardship.

We recognize the principles of the Ahlen Program, which primarily concern property law and social policy, yet we would like to supplement and further develop these principles with regard to the market economy.

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