The infographic illustrates which values and goals should be implemented by the market and the state in the free market economy.
Difference free and social market economy
In the free or liberal market economy exists in contrast to the social market economy no social balance. This means that if you become ill and cannot work for a longer period of time, you will not receive any support from the state. Disadvantaged people cannot assert themselves in free competition. Contrary to the value of equal opportunities, they are automatically worse off financially in the free market than people who can work without restrictions. the social market economy combines the free market with the idea of the welfare state. You will find out exactly how this works in the next section.
Social market economy characteristics
Of the welfare state intended in the social market economy intervene in the negative effects of the free market. The idea behind this is that a Market economy only leads to more prosperity if it is controlled by the state. This should only actively intervene in the economy as a supplement to the market. Examples of such interventions are social, economic or labor policy measures, such as unemployment benefits or social security.
Social market economy goals
The goals of the social market economy can be economic freedom and social balance structure Because, on the one hand, the economic form should be maximized economic success, i.e. lead money and prosperity. At the same time she should social participation and social peace support financially. That means all people in society should actively participate in the system and live together in peace. You can remember the concept of the social market economy relatively easily. In a social market economy, it is often said that one needs as much market as possibleand as little state as necessary. This means that the market should be left as free as possible and the state should only intervene directly in the market in a few cases.