Market economy

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The market economy is a central concept of economic theory and economic history .

In the theory of economic systems , market economy (formerly also transport economy ) describes an economic system in which the distribution of decision-making and action rights is carried out by the legal institution of private ownership of the means of production . Planning and coordination of the economic processes take place decentrally. The individual use plans of households and companies (use of income and profits) and the generation plans (profit formation and income generation) are coordinated by market prices . This coordination includes, on the one hand, the allocation and distribution of individual goods through market prices and, on the other hand, the allocation and distribution of public goods through political decisions. The individual plans of the economic entities are coordinated with one another via market prices and placed in a macroeconomic accounting context by linking the markets. This also relates to public and merit goods despite the lack of markets for them, since the use of goods or production factors that are themselves produced in a market-coordinating process is a prerequisite for producing the supply of public goods. In economic theory, the market economy is understood as a self-regulating and self-optimizing system, under the assumed condition of freedom of decision and action for economic subjects. Therefore, the idealized market economy is also understood per se as a free market economy . Real markets, however, sometimes deviate considerably from this idealized model.

Among the economic historians, Fernand Braudel in particular and, among others, Alfred Preussler insisted on the distinction between the historically older market economy and the capitalism that developed from it .

Theory and real history

The term market economy did not appear in German economics until the early 1930s: around the Freiburg School ( Hans Ritschl , 1931, and Franz Böhm , 1933) and the historical school ( Arthur Spiethoff , 1934). It is more recent than the concept of transport economics with the same meaning , which can already be found in Max Weber's work Economy and Society and which Walter Eucken continued to use.

According to Walter Eucken, there are two fundamentally contrary styles of thinking when analyzing economic systems, which he describes as "thinking in terms of order" and "thinking in terms of historical developments". According to Egon Tuchtfeldt, the question of which approach corresponds better to the overall problem of economic systems is still open today. In fact, thinking in terms of historical developments and thinking in terms of order need not be mutually exclusive. Correctly understood, both approaches would rather be a necessary and fruitful addition.

As an early economist, the Scottish moral philosopher Adam Smith described the market as an incentive and sanction mechanism in his main work, The Prosperity of Nations , which coordinates the self-serving behavior of people who work based on division of labor in such a way that the needs of the individual are satisfied as well as possible.

Walter Eucken understood the market economy (transport economy) as a pure ideal type that can be found "in all epochs of human history". For Eucken, ideal types were used to understand reality. According to Eucken, however, there is no real market economy.

In the 1980s, Franz-Xaver Kaufmann summarized the economic-sociological discussion in such a way that the “prevailing economic theory” neglects the historical and “socio-cultural nature of the modern economic system”. From a historical point of view, the market economy as a relatively autonomous economic system is a special case with certain, not self-evident conditions and limits. The prosperity of a society does not only depend on factors such as level of education, degree of industrialization or the availability of natural resources, but is also based on the institutional Framework of the economy, which consists of explicit and unwritten rules. In economics, the importance of institutions as "rules of the game" for the market economy is particularly emphasized by Douglass North , who together with Robert Fogel received the Nobel Prize in 1993 for studies of economic history.

A preoccupation with the historical and social requirements of the market economy (or "transport economy") can already be found in Max Weber and other classics of economic sociology . Weber characterizes the market community as an impersonal, practical relationship that contrasts with tribal affiliations or kinship. According to Weber, a market-based socialization of economic activity presupposes appropriation and market freedom , such as the absence of class monopolies.

Economic historian Karl Polanyi challenged Smith and Spencer's thesis that early forms of economics were based on barter. He followed on from studies of economic ethnology, especially by Bronislaw Malinowski , Marcel Mauss and Raymond Firth , who examined special economic forms based on generalized reciprocity (see for example gift economy ) in tribal societies . Polanyi was able to identify elements of reciprocity, redistribution, and direct exchange in all of the historically occurring economies he examined. Following on from this, today in cultural anthropology, the market economy as a real type is differentiated from other forms of economic activity, especially subsistence economy.

In his work "The Great Transformation" from 1944 Polanyi uses a narrow term of market economy ("actual market economy") for a self-regulating market. He limited its real historical existence to the historical period from 1834 to the end of the 19th century. He tied its beginnings to the development of the labor market. Only the reform of the English Poor Law of 1834, which abolished all monetary support to unemployed but able-bodied needy people ("human labor had to be made a commodity"), would have released the logic of the market system and thus "society as an appendage to the market" in other words made to the "market society". The social laws and the recognition of the trade unions at the end of the 19th century had already counteracted the market mechanism, although “the idea of ​​self-regulation remained dominant”. From the limited historical perspective of 1944, for Polanyi, the state regulations of the social democratic , communist and fascist regulations between the two world wars marked the end of the actual market economy, the "decisive departure from the idea or the 'myth' of a self-regulating market". Politically, Polanyi supported the social democratic regulations, while he rejected the communist and fascist ones as a threat to freedom.

According to Fernand Braudel , on the other hand, the market economy in Europe developed “step by step”.

“Historically, we have, in my opinion, been dealing with a market economy from the moment in which the markets in a certain zone show common price fluctuations and price agreements, a particularly characteristic phenomenon in that it extends beyond the various judicial districts and areas of government. In this sense, the market economy existed long before the 19th and 20th centuries. "

- Fernand Braudel : Social history of the 15th-18th centuries Century. Volume two: The trade. 1980, p. 243.

While for Polanyi the market economy is a synonym for capitalism, Braudel differentiates between market economy and capitalism.

Similar to Weber before, who - in a different terminology - had differentiated between the commercial and the needs economy , Niklas Luhmann sees the market economy not in opposition to the planned economy, but in contrast to the subsistence economy . In this there is usually no money as a control medium and the economic system has not yet differentiated itself as an independent subsystem of society (see autopoiesis ).

to form


Free market economy

In the free market economy model , what is produced and consumed, in what quantity and at what price is determined by the market alone . According to George Nikolaus Halm , a free market economy exists when:

  1. the production factors (labor, land, capital) are in private hands and production takes place on the initiative of private companies (i.e. private ownership of the means of production and free competition )
  2. Income is generated only through services and the profits of private companies
  3. no planned economy exists
  4. No state control or market regulation is
  5. market participants have freedom of choice consumption, employment, savings and investment terms (ie free pricing , freedom of trade and consumer freedom )
  6. the free pricing of various companies, especially in the real estate sector.

However, a completely free market economy is only an abstraction . In economic policy practice, there is more or less state market regulation in all countries.

The ideas propagated by Adam Smith in his book The Wealth of Nations do not mean that the state will be deprived of all right to exist. Rather, it has other important functions. This includes guaranteeing external security, protecting citizens from injustice and oppression by their fellow citizens, providing public facilities for which no private investor can be found, and counteracting monopolies. According to some authors, the doctrine of Adam Smith was developed "one-sided" and connected with the myth of the " invisible hand " to the idea of ​​a free market economy. Even in a free market economy, the state is assigned regulatory functions. If these are kept to a minimum, one speaks of a " night watchman state ", based on an ironic phrase by the workers' leader Ferdinand Lassalle .

Social market economy

The idea of ​​the model of the social market economy drafted by Alfred Müller-Armack and Ludwig Erhard is to realize the advantages of a free market economy, in particular the economic efficiency and the high supply of goods, but at the same time disadvantages such as destructive competition, concentration of economic power and anti-social effects of market processes to avoid. The aim of the social market economy is the greatest possible prosperity with the best possible social security. In contrast to the free market economy, the state does not behave passively, but rather actively intervenes in economic activity, "for example through economic, competition and social policy measures."

For Ludwig Erhard the expression social market economy was a pleonasm , because for him the market in itself is social. He concretized this idea by emphasizing that the freer the economy, the more social it is. In contrast, Müller-Armack saw the social market economy as an “ Irish formula” which “tries to bring the ideals of justice, freedom and economic growth into a reasonable balance”.

Socialist market economy

A socialist market economy is characterized by the coordination principle of decentralized planning and the ownership system of common ownership of the means of production. In contrast to this are the capitalist market economy with private ownership of the means of production and the socialist central administration economy with central planning.

Other models

There are a number of other theoretical models with which various authors claim to further develop the social market economy, for example the eco-social market economy , as well as the sustainable market economy ( Michael von Hauff ), the humane market economy ( Erwin Niesslein ) and the ethical market economy ( Hans Ruh ). Another variant is the civilized market economy of the St. Gallen business ethicist Peter Ulrich ; According to its creator, it is also a further development of the “concept of the social market economy that has become poorly oriented in the competition between locations”.

Real economic orders

In practice there are very different forms of market economy. These differ due to the different economic and social or sociopolitical objectives in the form of property and personal rights and the extent and forms of state intervention . Examples of this are the planification in France, the Swedish model in Scandinavia, Austrokeynesianism in Austria or the social market economy in Germany. With his book Capitalisme contre Capitalisme (1991) (German: Capitalism contra Capitalism ), Michel Albert coined the term "Rhenish capitalism" for the capitalist market economy that exists primarily in Germany, the Alpine countries and the Netherlands and transformed it into "neo-American" Model opposed. In their book Varieties of Capitalism (2001) Peter A. Hall and David Soskice described two variants of market economies - “liberal market economies” and “coordinated market economies”.

Market economy and capitalism

Several authors make the existence of a capitalist economic system of private ownership of the means of production -dependent and the market economy from the satisfaction of needs on markets . Economists often understand capitalism as a market economy with private ownership of the means of production. The prevailing economic system of the capitalist market economy today is determined by both terms. A market economy is theoretically conceivable without capitalism - as a socialist market economy - like capitalism without a market economy - as a capitalist central administration economy . According to the French social historian Fernand Braudel , the market economy developed “step by step” and came into being before capitalism with its “norm of unlimited accumulation”.

For other authors, the concept of market economy can hardly be distinguished from capitalism . According to John Kenneth Galbraith , it was instead introduced specifically after the Second World War as a new name for capitalism, which had fallen into disrepute due to the global economic crisis . The expression is completely meaningless, because in principle it means nothing other than the exchange of goods via markets. In fact, the order called market economy contains all structural elements of capitalism and is to be equated with this.

Market Mechanism and Efficiency

The economist Jürgen Pätzold describes the market mechanism as a “coordination mechanism that does not require any bureaucratic orders. In the market economy, every economic subject receives its information about the change in price signals. The plans and actions are continuously adapted to these changed market signals and thus gradually coordinated. The market-controlled system therefore has a higher flexibility and problem processing capacity compared to the central administration economy. […] However, these undisputed advantages of the market economy-based economy over bureaucratic control do not exclude the fact that the market economy reality can be characterized by undesirable developments. Experience with classic laissez faire liberalism has shown emphatically that a market economy order needs to be shaped and corrected by the state. "

Market failure

A market failure is a situation in a market economy in which the failure of the ideal of perfect competition does not result in an economically optimal distribution of goods and resources ,

Examples of market failure:

In the social market economy in particular, the state is therefore assigned the task of preventing market failure, for example through competition policy , environmental policy or the provision of public goods. If this does not succeed to the desired extent or if government measures even lead to further market failure, one speaks of government failure .

Market economy and social justice

In theory, the market economy leads to a performance-related income distribution , since income is significantly influenced by things such as education, professional qualifications, motivation and personal performance. It follows, of course, that less qualified workers are inferior to more highly qualified workers in terms of income. In practice, the distribution of income is also influenced by different starting conditions, which can be summarized under the term market power .

Government regulations, such as B. redistribution , income inequalities can be reduced. However, there is a risk that state intervention in the market economy, in particular, will lead to side effects that can sometimes turn the intention into the opposite.

The determination of social justice has been the subject of central political and philosophical debates since the 19th century. The utilitarianism of Jeremy Bentham has the felicific calculus designed. This is based on the principle that the greatest good to be achieved is that which leads to "the greatest possible happiness for the greatest possible number". Marxist criticism of the market economy starts from the class contradiction between capitalists and the working class , on the basis of which there can be no just social market economy. John Rawls developed the theory of justice . From this point of view, a completely equal distribution is not felt to be sensible, since it reduces the motivation to perform.

Market economy and acceptance in the population

The Allensbach Institute regularly surveys the attitudes of the German population towards the social market economy with the question “Are the economic conditions in Germany - I mean, what people own and what they earn - on the whole fair or not fair?” From 1964 By the early 1990s, the proportions of those who said the circumstances were fair and those who said they were unfair were roughly the same. Since then, however, the proportion of those who consider the conditions to be unjust has risen continuously. In 2013 it was 65 percent.


See also


Individual evidence

  1. For the theoretical determination and analysis of economic systems see: KP Hensel: Grundformen der Wirtschaftsordnung. Market economy and central administration economy. 3. Edition. Munich (Beck) 1978.
  2. ^ A. Eckstein: Comparison of economic systems: Theoretical and methodological approaches. California University, Berkeley 1971.
  3. ^ H. Bonus: Regulatory Aspects of Public Goods. In: E. Helmstädter: Newer developments in economics. (= Writings of the Verein für Socialpolitik, NF Volume 98). Duncker & Humblot, Berlin 1978, ISBN 3-428-04240-9 , pp. 49-82.
  4. ^ Lothar Wildmann: Introduction to economics, microeconomics and competition policy. (= Modules of economics. Volume 1). Edition 2. Oldenbourg Wissenschaftsverlag, 2010, ISBN 978-3-486-59111-8 , p. 51.
  5. Werner Vontobel : The chatter of the free market economy. How companies distort competition, exploit nature and ask taxpayers to pay for it (with Hanspeter Guggenbühl and Urs P. Gasche ). Zurich, Rio, 1996 (3rd edition 1997), ISBN 3-907768-15-9 .
  6. market economy. In: Historical-Critical Dictionary of Marxism. Volume 8 / II: Left / Right to Machine Striker. Argument-Verlag, Hamburg 2015, p. 1826.
  7. ^ Willi Albers: Concise dictionary of economics. Volume 9, Gustav Fischer, 1982, ISBN 3-525-10260-7 , pp. 327-329.
  8. Klaus-Peter Kruber: Theory history of the market economy . Münster 2002, ISBN 3-8258-6288-7 , p. 12 f.
  9. ^ Heinz Albert Tritschler, Concept and Forms of the Market Economy, University of Zurich, 1968, p. 156.
  10. Herbert Schack : The basics of economic and social philosophy. 2nd edition. Duncker & Humblot Verlag, 1978, ISBN 3-428-04193-3 , p. 87.
  11. ^ Heinz-Dietrich Ortlieb : Hamburg yearbook for economic and social policy. Volume 4, Verlag JCB Mohr (P. Siebeck), 1959, p. 24.
  12. Franz-Xaver Kaufmann : Economic Sociology I. In: Willi Albers et al. (Ed.): Concise dictionary of economic science. Volume 9, Stuttgart 1982, pp. 239-267, 251.
  13. Franz-Xaver Kaufmann : Economic Sociology I. In: Willi Albers et al. (Ed.): Concise dictionary of economic science. Volume 9, Stuttgart 1982, pp. 239-267, 251.
  14. Peter Bofinger: Fundamentals of Economics: An Introduction to the Science of Markets. 3. Edition. Verlag Pearson Germany, 2010, ISBN 978-3-8273-7354-0 , p. 562.
  15. Peter Bofinger: Fundamentals of Economics: An Introduction to the Science of Markets. 3. Edition. Verlag Pearson Germany, 2010, ISBN 978-3-8273-7354-0 , p. 562.
  16. ^ Robert Layton: An introduction to theory in anthropology. Cambridge University Press, 1997, ISBN 0-521-62982-9 , pp. 99f.
  17. ^ Richard Swedberg : Foreword. In: Jens Beckert , Rainer Diaz-Bone , Heiner Ganssmann (eds.): Markets as social structures. Campus Verlag, 2007, ISBN 978-3-593-38471-9 , p. 12.
  18. James Peoples, Garrick Bailey: Humanity: An Introduction to Cultural Anthropology. 9th edition. Cengage Learning, 2011, ISBN 978-1-111-30152-1 , pp. 144f.
  19. Cf. also the more complex scheme for typifying forms of coordination on the basis of the distinction between 1) exchange in markets, 2) compulsion in hierarchies and 3) gifts / personal relationships in small groups, Bernhard Beck: Mikroökonomie. Zurich 2011, p. 20ff.
  20. ^ Karl Polanyi: The Great Transformation . Suhrkamp, ​​Frankfurt am Main 1978, p. 146.
  21. ^ Karl Polanyi: The Great Transformation . Suhrkamp, ​​Frankfurt am Main 1978, pp. 88f.
  22. ^ Josef Ehmer , Reinhold Reith : Markets in pre-industrial Europe. In: Yearbook for Economic History. Akademie Verlag, 2004, ISBN 3-05-004036-X , p. 14.
  23. Fernand Braudel: Social history of the 15th-18th centuries Century. Volume two: The trade. Kindler, Munich 1980, p. 244.
  24. ^ Niklas Luhmann: Economy of Society. Suhrkamp, ​​Frankfurt am Main 1994, p. 97.
  25. ^ Ved Prakash: Strategic Management. Anmol Publications, New Delhi 2005, p. 97.
  26. ^ Ved Prakash: Strategic Management. Anmol Publications, New Delhi 2005, p. 97.
  27. ^ Neri Salvadori and Rodolfo Signorino: Adam Smith on Monopoly Theory. Making good a lacuna , April 27, 2012, p. 12ff.
  28. ^ Warren S. Gramm: The Selective Interpretation of Adam Smith. In: Journal of Economic Issues. Volume XIV, 1980, pp. 119ff.
  29. Amartya Sen: The idea of ​​justice. Harvard University Press, 2009, p. 186 f.
  30. ^ Lothar Wildmann: Introduction to economics, microeconomics and competition policy . Oldenbourg Wissenschaftsverlag, 2007, ISBN 978-3-486-58195-9 , p. 26.
  31. Social market economy. In: Duden Economy from A to Z: Basic knowledge for school and study, work and everyday life. 4th edition. Bibliographical Institute, Mannheim 2009.
  32. ^ Alfred C. Mierzejewski: Ludwig Erhard: the trailblazer of the social market economy. Biography. Siedler, Munich 2005, ISBN 3-88680-823-8 , p. 59.
  33. ^ Alfred Müller-Armack: The moralist and the economist. On the question of the humanization of the economy. In: Ders: Genealogy of the social market economy. 2., ext. Edition. Haupt, Bern 1981. Quoted from: Lexikon Soziale Marktwirtschaft. Schöningh, Paderborn, p. 386.
  34. Michael von Hauff: The future viability of the social market economy. Metropolis-Verlag, Marburg 2007.
  35. ^ Erwin Niesslein: Humane market economy. Economic aspects of environmental policy. Hochschul-Verlag, Freiburg (Breisgau) 1981, ISBN 3-8107-6801-4 .
  36. See Hans Ruh: Order from below. Reinvent democracy . Versus, Zurich 2011, pp. 85ff.
  37. ^ Peter Ulrich: Civilized market economy. A business ethical orientation . Updated and expanded new edition. Haupt, Bern 2010, p. 181.
  38. market economy. In: The Brockhaus Economy: Business and Economics, Stock Exchange, Finances, Insurance and Taxes. Issue 16, Verlag FA Brockhaus, 2004, ISBN 3-7653-0311-9 .
  39. ^ Michel Albert: Capitalism contra capitalism . Frankfurt am Main: Campus, 1992.
  40. Peter A. Hall / David W. Soskice: Varieties of capitalism: the institutional foundations of comparative advantage . Oxford University Press, Oxford 2001.
  41. Ulrich Baßeler, Jürgen Heinrich: economies. Capitalist market economy and socialist centrally planned economy. Wurzburg 1984.
  42. ^ A b Jürgen Pätzold: Social market economy. Conception - development - future tasks. 6th edition. Ludwigsburg, Berlin 1994.
  43. ↑ For example: N. Gregory Mankiw: Grundzüge der Volkswirtschaftslehre. 3. Edition. Stuttgart 2004, p. 255.
  44. Luc Boltanski, Ève Chiapello: The new spirit of capitalism . UVK Verlagsgesellschaft, Konstanz 2003, p. 40.
  45. market failure. In :
  46. ^ Thomas Petersen: Allensbach analysis. Silent love for the planned economy . In: Frankfurter Allgemeine Zeitung of November 27, 2013

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