Social Market Economy Vs. Social Market Socialism
Hema Senanayake
Social Market Economy may be a familiar term or concept but the other concept might be new. As I perceive it, both concepts have very similar economic components but there is one significant difference. What is it?
Social Market Economy will continue to link the distribution of distributable output significantly to the ownership of means of production. On the contrary “Social Market Socialism” will separate the distribution of distributable output significantly from the ownership of means of production. This difference is not just theoretical; instead it has very far reaching practical impact. The impact is related to the efficiency of the economy. Let us discuss this matter further.
The UNFGG (United National Front for Good Governance) proposes an economic model which they define as “Social Market Economy.” If you are an interested reader of this subject, you may easily browse internet to read many scholarly articles written on the subject. Yet, my purpose here, in this article is to direct this discussion towards a possible application.
In regard to the concept of Social Market Economy, the word “Market” intimates in achieving economic efficiency through market mechanism and the word “Social” should stand for “public services and the state’s intervention in the economy.” In other words the efficiency of the economy would be primarily attained through “market mechanism” and the efficiency of fair distribution of distributable (or consumable) output would be attained through the intervention of the state or the government. Is this the economic model what UNFGG proposes? I guess it is. Then, what was the model existed under the previous regime? Priorities and components might vary, but previous regime too stood for Social Market Economy; no economist can deny it, even if so called corruption and nepotism existed under the previous regime. If this is the case, then this type of economic system must be properly defined not as “Social Market Economy” but as “Social Market Capitalism.”