Saturday, March 15, 2014
Congressional A (Omni Shoreham)
Not long ago Germany was characterized as the “sick man of Europe” due to anemic economic performance, a bloated social state, and bleak growth predictions. The social market economy (SME), lauded for the spurring the “Wirtschaftswunder” of the 1950s, was proclaimed dead. Yet just a few years later Germany is being celebrated as an economic model in the midst of a global economic and financial crisis and the SME is at the forefront of academic and policy discussions. What explains this dramatic turnaround? In contrast to prevailing macroeconomic explanations, this paper investigates the resurrection of the SME as the return of a dominant discourse on socio-economic organization. More specifically, the paper develops an analysis of key statements, speeches, and policy decisions to demonstrate how the idea of the SME – a deep-seated consensus on social protections combined with a strong state role in ensuring competition, embedded in ideas of consensus, solidarity, and subsidiarity – was re-articulated in Germany and how it has displaced competing discourses. The strategic position of Germany cannot alone explain either the policy choices made during the crisis or the saliency of the SME discourse. Instead, I argue that the SME discourse was able to “make sense” of the economic crisis and offer set of responses that appeared logical, legitimate, and coherent—particularly with regard to the appropriate balance between market forces and social protection. In addition, the re-articulation of the SME discourse within Germany has also shaped the broader European response to the economic and financial crisis.
