What kind of economic system does Germany have?


Quick Answer

According to Economy Watch, Germany has a social market economy, which the Germans call a "soziale marktwirtschaft." PBS indicates that the social market economy was put into play by Ludwig Erhard, who was the minister of economic affairs for Germany.

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What kind of economic system does Germany have?
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Full Answer

Economy Watch says that Germany's social market was put into practice in West Germany in the early 1960s. Germany's social market economy has three main principles: the liberal view of individual freedom, solidarity (which Economy Watch describes as a situation in which an individual serves a purpose in a larger society containing mutual dependencies) and the state's role in shaping the relationship between individuality and solidarity. When West Germany merged with East Germany in 1990, the newly reunified Germany continued with the social market economic model.

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