Ecological-social market economy: With entrepreneurial freedom and momentum for more sustainability

Even a successful model has to continue developing and be prepared for the future. This also applies to the social market economy. It is one of the key factors in Germany’s social and economic development after the Second World War. When people talk about a social market economy today, they often include an ecological component – but rarely do they say so. We should change this, because after all, the official day of the ecological-social market economy has been on September 12th since the year 2000 – in other words, for 20 years now. If we leave the pressing ecological questions out of the equation, even the proven social market economy on its own would reach its limits. Ultimately, we have to give future generations something to believe in – not only in a social sense, but also in an ecological sense: We have to leave behind a world that is worth living in!

Let me briefly explain my definition of an ecological-social market economy: I am firmly convinced that sustainability and economic success are not contradictory. On the contrary, without profit, important, ecologically relevant innovations for the future of our planet could neither be developed nor ultimately implemented. Only if the necessary resources are available, I believe, can economy and ecology be combined in a goal-oriented manner.

For me, an ecological-social market economy means ongoing development – not revolution. The social market economy works and has proven itself over decades. However, in view of the dramatic pace and scope of climate change, we need to extend market mechanisms to ecology to a much greater extent in order to develop the necessary dynamics.

By the way, the essence of these dynamics also includes the greatest possible entrepreneurial freedom. Prohibitions are the opposite of this. They do not direct behaviour – they completely prevent it. In my opinion, politics and society must define the framework conditions – for example, through a new form of public procurement in which it’s not the cheapest provider that gets the contract, but rather the most sustainable one. What is decisive is the political definition of the big goal. The right way to achieve this goal will then emerge in the competition of ideas. This will prevent costly detours and false starts – both of which are ultimately paid for by taxes. Socialist fantasies, as they have recently regained popularity, will not help us.

That’s why it’s important to allow as much leeway as possible. Politics should, for example, define the ecological balance that is desired in the long term, but how this eco-balance is achieved is better left to the creative power of entrepreneurial freedom. In this context, the concept of the long term is particularly important to me: We need reliable time horizons and a framework that allows both the economy and consumers to plan ahead.

Digitalisation is also a crucial factor for a successful ecological-social market economy. One example of this is the agricultural sector. Digital farming solutions – the use of digital technologies such as software, satellite data, etc., on the farm and in the field – support the sustainable and effective use of resources by, for example, supplying crops with the nutrients and water they need as precisely as possible.

Since 1994, Germany’s constitution has stipulated that “mindful also of its responsibility towards future generations, the state shall protect the natural foundations of life”. It is time for this constitutional postulate to play a greater role than the ecological-social market economy in determining political, economic and social action – as a further development of our uniquely successful model of the social market economy.