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Germany. A Model of Economic Growth. Ideological Institutions and the German Economy. A focus on the emergence of the Social Market Economy. National Socialist Germany. Egalitarian model at odds with western social hierarchies “The common good takes precedence over that of the individual”

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A Model of Economic Growth

Ideological institutions and the german economy

Ideological Institutions and the German Economy

A focus on the emergence of the Social Market Economy

National socialist germany
National Socialist Germany

Egalitarian model at odds with western social hierarchies

“The common good takes precedence over that of the individual”

A top-down approach

Omnipotent executive powers

Service to the Fatherland

Utilized as a means of mobilizing massive armies

Defeat and division
Defeat and Division

Defeat of the Third Reich crushed German faith

Occupation brought with it foreign ideology

West - A parliament founded on compromises between center-left and center-right moderates. Supported by the Western bloc

East - Communist authoritative power operating as a satellite soviet state

Federal republic
Federal Republic

1951 - Ludwig Erhard and liberal collaborators introduces the idea of a Social Market economy

Competitive advantages of free enterprise with negligible states intervention

Stability and security of social security and controlled growth

Seeked to unify protestant, catholic and socialist ethics behind liberalism

The german social market economic model
The German Social Market Economic Model

Construction of a market economy on an ethical basis

All social, ethical, cultural and human values are more important than the economy

Interventionism and collectivism suppresses the individual and impedes his ability to recognize transcendent human values

Secret memorandum
Secret Memorandum

"The task of the state is not to run

the economy, but to provide the necessary legal and institutional framework for its proper functioning under the rules of law. To define the role of the state will be one of the most important problems of the post–war economy."

Ludwig Erhard

Economic institutions

Economic Institutions

A focus on specific policies, reforms, and major economic events

Social market economy hierarchy and function
Social Market Economy – Hierarchy and Function

  • Chancellor

  • Minister of Finance

  • Minister for Economy

  • The Federal Cartel Office

  • (The Bundeskartellamt)

Labour reforms
Labour Reforms

The Hartz Concept


Hartz I & II

Hartz IV

European union
European Union

The Euro

Political and economic weight

World’s largest exporter

2008 eurozone crisis
2008 Eurozone Crisis

“The Austerity Dictator”

German products become cheaper

German image from the past


Short-work program

Training Programs

Up to 1.5 million employees



A focus on the training and methods of the German workforce



Knowledge on how to do things

Available skills and labour force

Land and natural resources available

Components of Technology

Germany s economy
Germany’s Economy

Economy grew by 0.7% in 2012

Leading country in sustainability development

Siemens (sustainability company)

The german manufacturing success
The German Manufacturing Success

Close relationship  financial and industrial sectors

Innovative industrial relations

Vocational Schools

Natural resources energy production
Natural Resources / Energy Production

Few natural resources

A major producer of bituminous coal and brown coal

Relies principally on fossil fuels as sources of energy



Upper secondary students attend apprenticeship or vocational school

Ambition and talent will lead to job

3-4 years after high school job training, guaranteed full time job

High productivity and efficiency (maximizing labour force with low unemployment rate)

Labour force statistics
Labour Force Statistics

In 2011 87.7% of the people aged between 25 and 54 were in the labour force

The employment rate of German youth in 2011 was 48%

Social institutions

Social Institutions

A focus on the public sector


“Germany considers itself a welfare state that considers social protection of all its citizens as a priority”

26.7% of the country’s gross domestic product is channeled into public welfare spending


Strong Sense of Community (95% vs. 91%)

Civic Participation (3/4 of youth)

Voter Turnout (78% vs. 73%)


  • Dual-track education system

    • Kindergarten

    • Elementary School

      • Gymnasium

      • Realschule

      • Hauptschule

      • Berufsschule

      • Gesamtschule

Health care1
Health Care

Largest employment sector

Strong emphasis on health care availability

2007 reform

Health Insurance or "Krankenversicherung" is mandatory in Germany

Health insurance
Health Insurance

  • Statutory Health Insurance

    • “Gesetzliche Krankenversicherung (GKV)”

      • < 3975 Euros

  • Private Health Insurance

    • “Private Krakenversicherung (PKV)”

      • > 3975 Euros

      • Self-employed

      • Civil servant