Germany’s post-war economic miracle was founded upon a clear alignment
towards free market capitalism, an active competition policy and the primacy of
a stable currency.
All this is based on the system of ordoliberalism of which
Walter Eucken was a leading proponent. Ordoliberalism dictates that free
markets will drive competition, innovation, customer orientation and fair prices.
Unacceptable outcomes for society, meanwhile, are prevented by competition
laws, market regulation, economic and social policy, and by limiting economic
power. The social market economy is an internationally recognised model. It has
also weathered several major challenges including the integration of Europe, the
advancing globalisation of trade and the division of labour across national
Although Germany essentially trusts the power of competition, markets and free
enterprise, its key decision-makers still have the courage to cooperate in an
extremely flexible way in precarious economic and political situations and when
future competitiveness is at stake. This willingness to adapt, which reaches up
to the highest level of government, has been a key factor in its success.