To what extent Mikhail Gorbachev′s Glasnost and Perestroika anticipate the paradigm of a socialist market economy,is investigated. Gorbachev, like China′s Deng Xiaoping…
To what extent Mikhail Gorbachev′s Glasnost and Perestroika anticipate the paradigm of a socialist market economy, is investigated. Gorbachev, like China′s Deng Xiaoping, realises that socio‐economic theories which abstract themselves from the observations and needs of daily life have little relevance. That is, a meaningful paradigm has to pay attention to society′s values, especially to the interrelationship of personal initiative, morality, law, government and public policy. Hence, Gorbachev advocates the establishment of more favourable socio‐economic conditions to lay the foundation for a “functional socialist social market economy”, however defined, in the Soviet Union.
Anghel Rugina's major contribution to social economics is that he keeps the paradigm of a social market economy evolving by promoting thought‐provoking dialogues. In that role, he is functioning as part of the spiral of the Helgelian dialectical process, where the interaction of thesis and antithesis leads to a new synthesis, by utilising his methodology of the orientation table and his new research programme. In Rugina's words: “I attempted to complete as far as possible the work of Walter Eucken (the Freiburg School) and that of Leon Walras (the Lausanne School)”. Rugina claims that he has discovered a new general paradigm which has the potential of replacing all other paradigms by unifying them in his “new research programme”.
The socioeconomic as well as the political world has undergone significant changes, challenging the meaning and validity of economic and political paradigms. This treatise highlights that Eucken's paradigm of a “social market economy,” with its structural and regulating principles, needs to be modified to account for changing strategic factors.
No economic theories, however relevant in the past, hold true for all time. This is verified by the dynamics of change as indicated by Hegelian dialectics, functionalism and structuralism, as well as by quantum theory.
National economies have become linked in the widening web of the global economy, exemplified, for example, by the European Union, the Euro Bloc, NAFTA, WTO, as well as by other trading arrangements. Enterprises have developed a global orientation, internationalizing their products and services, encouraging labor and capital to move instantaneously among industrialized countries, affecting social, fiscal, and monetary policies. Furthermore, these developments have increased awareness, on a global scale, about human rights and dignity, a healthy environment, changing demographics, and of limited natural resources.
There is increasing awareness of contemporary challenges facing mankind and the environment, as well as the merging of national economies within a global framework. These challenges with their demands for modifications in socioeconomic as well as political policies may transform the paradigm of a “social market economy” into an “ecological social market economy”.
Traditional economic theories usually consider capital and labor as the primary factors of production. Nature (all natural resources), on the other hand, tends to be neglected as an economic good and as an essential third factor of production. A political economy is suggested which assigns equal importance to man and nature, the costs of which have to be fully accounted for, including those for the preservation and regeneration of natural resources.
Sees East Germany as an important case study of an ideologicallydogmatic bureaucracy which ignored people′s deep‐seated ethical normsand values. The principles of…
Sees East Germany as an important case study of an ideologically dogmatic bureaucracy which ignored people′s deep‐seated ethical norms and values. The principles of solidarity, subsidiarity and justice were insufficiently exercised. The political leadership failed to recognize and understand the degree of people′s resignation and frustration, being out of touch with socioeconomic reality. Hence it programmed false decision making and inefficiencies into a system which was held together by an excessive police apparatus, repression, corruption and propaganda. As a result, the East German system imploded under its own irrationality, induced by an almost complete loss of confidence in the ruling party and the government. Addresses primarily ethical rather than economic issues which successfully challenged the East German state.
The paradigm of a social market economy postulates that theevolution of a functional market economy, as the guarantor of freedom,human dignity and justice, cannot be left…
The paradigm of a social market economy postulates that the evolution of a functional market economy, as the guarantor of freedom, human dignity and justice, cannot be left to chance but must be consciously guided along the “principles” of Eucken′s economic constitution. The moral problem of modern capitalism can be spelled out in terms of imbalances between economic and ethical norms in the public and private sectors, the influence of special interest groups and politicians to pursue measures detrimental to a competitive market economy, ideological prejudices about common welfare and a socially‐caring state, insufficient adherence to the fact that it is in everyone′s interest to be concerned about everyone′s welfare, and, to summarise, imbalances in the principle that “government should govern as little as possible but not do as little as possible” or between “as much centralisation as necessary with as much decentralisation as possible” in the economy.
Eucken′s paradigm of a “social market economy” provides a framework for a functional free‐market mechanism, which not only accommodates development and change, but which also assures human dignity and freedom. Eucken places special emphasis on the integration of economics with “order” and “justice”. He holds that an unconstrained laissez‐faire economy does not assure a competitive economy but that it will degenerate into monopolistic practices. Eucken formulates his “structural” and “regulating” principles to facilitate a functionally competitive economy with a compatible social policy, to assure greater efficiency and to reduce poverty.
Gorbachev is in the process of not only abolishing central planning and the privileges of the nomenclatura but also establishing broad political dialogue and elections, and, most importantly, at least some forms of private property and the price mechanism. He realises that socioeconomic theories which abstract themselves from the observations and needs of daily life have little relevance. Furthermore, he is aware of the fact that a meaningful paradigm has to pay attention to society′s values, i.e. to the interrelationship of personal initiative, morality, law, government and public policy. Hence, Gorbachev advocates the establishment of more favourable socioeconomic conditions to lay the foundation for a “functional social market economy”, however defined, in the Soviet Union.
“Socially‐oriented” socioeconomic policies for the USA and Germany have both “meaning” and “validity” in that they would address themselves to socioeconomic concerns and…
“Socially‐oriented” socioeconomic policies for the USA and Germany have both “meaning” and “validity” in that they would address themselves to socioeconomic concerns and could be implemented. Narrowly oriented socioeconomic policies are neither politically nor socially acceptable in the long run. In a mature socioeconomic system, such as the USA or Germany, the focal question centres not only on efficiency and productivity but also on human values, especially the rights for freedom, for a productive and creative life, and for a life in dignity. The basic question each country faces is what kind of socioeconomic policies it should actively pursue in order to strengthen the market system and to maximize social welfare as effectively as possible.
The People’s Republic of China, as a progressively developing economy, is subject to dynamic structural changes, which are potentially de‐stabilizing in nature. Since the…
The People’s Republic of China, as a progressively developing economy, is subject to dynamic structural changes, which are potentially de‐stabilizing in nature. Since the end of the 1970s China had abandoned Mao Zedong’s socioeconomic theories and policies and instituted profound socioeconomic reforms. Her more pragmatic approach has increasingly emphasized economic freedom and individualism. The pursued “pragmatism” involves a revolutionary mixture of both a planned and a market economy with greater economic but not political freedom. Essential socioeconomic reforms were not complemented by requisite political reforms. According to Walter Eucken’s “instability thesis,” this may de‐stabilize China’s socioeconomic and political structures. The challenge which China continues to face is how to reconcile two sets of conflicting principles, economic freedom and Marxist‐Leninist‐Maoist control of politics and society, resolving Eucken’s hypothesis of potential long‐term instability. This paper addresses this challenge in terms of ethical and economic perspectives.
John E. Elliott has been a professor of economics at the University of Southern California in Los Angeles since 1956 when he graduated from Harvard University with a…
John E. Elliott has been a professor of economics at the University of Southern California in Los Angeles since 1956 when he graduated from Harvard University with a doctorate in economics. In that position at USC, John has distinguished himself not only as a scholar and prolific writer but also as an outstanding teacher. He has received every teaching honour which USC has within its power to bestow. Moreover, John has distinguished himself for his contribution to the wellbeing of the faculty and to the advancement of its efforts to preserve and extend the concept of academic freedom. John E. Elliott was born in the year 1931 and the essays which comprise this Festschrift are written in celebration of his sixtieth birthday. The numerous awards he has received for the high quality of his teaching, for his creativity and innovation in the dissemination of knowledge, his record of books published, articles contributed to scholarly journals, and book reviews, are to be found in his curriculum vitae printed at the end of this work.