Social policy is increasingly equated with redistributing and spending money. That does not go far enough – it undermines the willingness to take personal responsibility and thus the foundations of our prosperity.
LIf the success of the social market economy were to be measured by the amount of state social spending, then there would be a brilliant success story to tell: When Ludwig Erhard became Federal Chancellor in 1963, thanks to his reputation as the founding father of the social market economy, the West German welfare state gave 70 billion D- Mark from what at that time was 19 percent of the total economic output. By the fall of the Berlin Wall in 1989, this had grown to 600 billion Deutschmarks or 25 percent. And in 2019 the nationwide welfare state surpassed the one trillion euro mark for the first time – a good 30 percent of gross domestic product.
In fact, the numbers describe anything but a success of the social market economy, as its spiritual parents imagined. It’s the story of an alienation. A look at Erhard’s famous work “Prosperity for All”: It turns against “the growing socialization of income use, the spreading collectivization of life planning, the extensive incapacitation of the individual and the increasing dependence on the collective or the state”. At the end of the “dangerous path to the supplying state”, citizens would become “social subjects” of an “all-powerful state” while at the same time “paralyzing economic progress in freedom”.