faire Liberalism. Yet, in contrast to economic control opposed to the market economy, which in the past decades paralysed large sectors of the automatic market mechanism, the Social Market Economy is based upon the premises that competition is indispensable as an instrument of social organization. While accepting the need for competition in principle, one needs also to be conscious of the variety of insights and claims to be attributed to the word "social""186. If politicians are to act in accordance with moral and social principles then Social Market Economy will provide a set of premises. It is necessary to be aware of the "underlying moral values which constitute the basis for the construction of society".He sees it as "the only possible way of achieving social progress while maintaining the functions of the market". Ludwig Erhard interpreted "Social Market Economy as an economic system combining market freedom with social equilibrium, with the government playing a regulating role and creating the framework for market processes"187. Social Market Economy at that time was based on the moral and ethical values of Catholic Social Teaching. There is no unambiguous definition of Social Market Economy, and Ederer attempts to sum up different opinions in this definition: "The Social Market Economy is a socio-economic system in which the fundamental processes, production, exchange, and distribution, operate for the most part in response to free decisions of consumers and producers competing on the market, but where these are subject to such restraints as may be dictated by the demands of social justice"188.
9.16. Summary. To summarise, this chapter argues that •
based on the principles of solidarity and solidarism, and using neo-scholasticism as the new philosophical foundation, Henrich Pesch offered a new and unique way of viewing economic affairs, which led to the later formulation of solidarist economics and personalist economics.
185
186
Erderer, R. (1969): Capitalism, Socialism, and Social Market Economy, Review of Social Economy Nagelschmitz, H. (1997): Ludwig Erhard: Architect of the "Economic Miracle", A Tribute on his 100 th birth anniversary, German News, The Magazine, Aug./Sept. 1998, www.germanembassyindia.org/news/march97/erhard.htm 188
Erderer, R. (1969): Capitalism, Socialism, and the Social Market Ecnomy, Review of Social Economy, pp.
102