Promoting the Transformation from Capitalist to Social-Ecological Market Economy
Key issues in view of the neoliberal crisis:
How can we guarantee employment and fair income?
How can we protect the environment effectively?
How should we shape the economic globalization?
What should the economic sciences contribute?
What must be the vital tasks of economic policy?
How can we legitimize economic policy democratically?
Table of Contents
This WordPress account serves to create a compendium, which is dedicated to the original strength and efficiency of the market economy. Economically the compendium aims to pave the way for a future-proof regional and global economic order. Politically it is bound to establish social justice and ecological sustainability, or to put it briefly: To establish sustainable social welfare!
Furthermore, it aims to contribute to a common language for economists and economic policy makers. And finally, it is committed to provide evidence that market economy and capitalism are not synonymous – that only a non-capitalistic market economy promises to meet future challenges.
This compendium complements conventional economic compendia in respect of the social and ecological repercussions that each and every economic activity entails. With these consequences in mind, economic mechanisms will appear in a different light, and it becomes imperative to redefine and readjust them.
I give preference here to fundamental mechanisms concerning markets, competition, pricing, productivity, growth, factors of production, foreign trade, and so forth. I will add English-language entries at regular intervals.
3. Current Articles in the Compendium
E: Economic Competition / Economic Dumping / Economic Ethics / Economic Externalities / Economic Globalization / Economic Pricing / Economics and Economic Policy / Economic Subsidiarity / Economy and Biosphere / Economy and Entropy / Efficiency and Productivity / Efficiency of Natural Resources / EU: Federal Superstate or Confederation? / Excesses of Capitalism / Expansion and Growth
F: Factor Price Equalization / Factors of Production / Financial Market Crisis 2008 / Foreign Trade in Goods and Services / Free Trade Area, Customs and Economic Union / Free Trade in Intellectual Property / Full Employment / Future-Proof Foreign Trade
M: Manifesto for the Citizens of Europe / Market and Market Economy / Maximes of Economic Order / Mobility of Production Factors / Money and Monetary Policy / Money Creation and Destruction / Multi-Bilateral Exchange Rate System
P: Paul Krugman’s Blind Spots / Political Versus Economic Integration / Pricing on Free, Regulated Markets / Principles of Democracy / Principles of Global Economic Order / Principles of Regional Economic Order / Private and Public Goods / Privatization and Public Services / Protection and Protectionism / Public Goods and Services / Punitive Tariffs and Trade War
S: Scale Economies and Productivity / Shareholder Value (English) / Socialecological Equilibrium / Socialecological Productivity / Solidary Distributive Justice / Stakeholder Value (English) / Structure-Forming Development Aid / Subsidiarily Structured Democracy / Subsidiary Specialization and Division of Labour / Sustainable Social Welfare
A: Allgemeines Gleichgewicht / Alternative für Deutschland / Arbeitswertlehre / Aufbau subsidiärer Wirtschaftsstrukturen / Außenhandel mit Gütern und Dienstleistungen / Autonome regionale Wirtschaftsräume / Autonome Wirtschaftspolitik
E: Effizienz der natürlichen Ressourcen / Effizienz und Produktivität / Eignungstest für Politiker / EU: Bundesstaat oder Staatenbund? / Eurokrise oder EU-Krise? / Expansion und Wachstum / Exzesse des Kapitalismus
N: Nachhaltige gesellschaftliche Wohlfahrt / Nachhaltige Wohlfahrt: Kurzfassung / Neoliberaler Teufelskreis / Neoliberale Scheinargumente / Neoliberale Wirtschaftsdoktrin / Neoliberalismus alt und neu
P: Paul Krugmans blinde Flecken / Pflichtigkeiten des Produktionskapitals / Politische versus wirtschaftliche Integration / Preisbildung auf freien, geregelten Märkten / Prinzipien der Demokratie / Prinzipien globaler Wirtschaftsordnung / Prinzipien regionaler Wirtschaftsordnung / Private und öffentliche Güter / Privatisierung und Daseinsvorsorge / Produktionsfaktoren / Protektion und Protektionismus
S: Shareholder Value (deutsch) / Skalenerträge und Produktivität / Solidarische Verteilungsgerechtigkeit / Sozialökologische Produktivität / Sozialökologisches Gleichgewicht / Stakeholder Value (deutsch) / Strafzölle und Handelskrieg / Strukturgerechte Entwicklungshilfe / Subsidiäre Spezialisierung und Arbeitsteilung / Subsidiär strukturierte Demokratie
W: Währungskrieg und Wechselkurs / Welthandelsorganisation (WTO) / Wertschöpfungskette / Wie weitere Trumpianer zu verhindern sind / Wirtschaftliche Externalitäten / Wirtschaftliche Globalisierung / Wirtschaftliche Preisbildung / Wirtschaftliche Regionalisierung / Wirtschaftlicher Wettbewerb / Wirtschaftliches Dumping / Wirtschaftliche Subsidiarität / Wirtschaftsethik / Wirtschaft und Biosphäre / Wirtschaft und Entropie
4. Starting Point for the Creation of the Compendium
Since the seventies of the last century, an economic and political conception has spread that sees prosperity and welfare only guaranteed, if absolute freedom is granted to global industrial players. These freedoms, regarded as fundamental rights, allow global players to operate beyond national norms and laws. Consequently, economic regulation and control are considered obstructive and superfluous.
The key measure for the implementation of this historically unprecedented economic dogma is the deregulation of national markets to establish »liberalized« global markets. The development is described by its advocates – with the intend to indoctrinate the general public – as historically imperative, prosperity-generating and without alternative. But the uncontrolled global competition deriving from the »liberalization« proves to be a predatory competition aiming to definitely monopolize and eliminate competitors and, at the same time, causing high social and environmental costs throughout the world.
In political terms, the economic dogma is directed against social justice and environmental sustainability, basically against the principles of solidarity and subsidiarity.
I deliberately use the adjective of the term »social-ecological market economy« in the order shown, because social justice is, no doubt, a precondition for environmentally sustainable economic activities.
5. Evaluation of the Current Economic Dogma
Under the new economic dogma »liberalized« markets are attributed the capability to automatically fulfil political functions in addition to their original economic functions. Specifically, it is assumed that markets control and stabilize themselves automatically, consequently allocating the factors of production (labor, natural resources and productive capital) in the best possible way, and ultimately generating prosperity and welfare without regulation and control. Therefore, the promised prosperity and the associated financial strength are pretended preconditions for an environmentally sustainable economic approach. Because of this false assertion, the indispensable debate on environmental issues is continuously postponed.
Under the lawless (anarchic) market conditions the self-interest of economic players inevitably turns against society and environment. When economic control gets under the primacy of self-interest, markets finally fail, because the social and environmental costs caused by the players (for example: unemployment and climate change) are disregarded in the pricing of productive factors and products, resulting in a destructive misdirection of economic processes.
What the protagonists call »free« – and many critics erroneously call »radical« – is in fact a state of economic anarchy and a perversion of the ideals of market economy. The conceptual confusion particularly succeeds, because the entrepreneurial players would have the choice to freely decide on the allocation of productive factors under any conceivable market economy. But when referring to the hypothesis of a regulated, future-proof system, the freedom would be granted within the social and environmental limits set by economic policy, and would therefore not degenerate into a state of anarchy.
However, a future-proof market economy essentially differs from other systems by its imperative inclusion of social and environmental costs into the pricing of productive factors and products.
Social and environmental costs can be included into the pricing by means of taxing economically costly (destructive) use of productive factors and products and through favored tax treatment of profitable use. Such a tax regulation, aimed at sustainability, can only emerge from democratic decision-making. That is, a future-oriented economic policy must be democratically legitimized to produce an equally legitimized economic system. This compendium is intended to support such a symbiosis of democracy and market economy.
6. Political and Economical Objectives
No doubt, there has never been an undesirable development in economic history of the scale of the current economic globalization. A development, for which the term »neoliberal» has come into use since the mid-nineties of the last century. And certainly, a change of the governing economic paradigm has never been more urgent than today. In particular, because the economic policy has never been so inconsistent with respect to the objectives of social justice and environmental sustainability.
The challenge we face can be formulated as three demands addressed to ourselves:
The above demands require a rethinking in many areas of social life: To achieve real progress, optimal income distribution and lasting welfare, the technological progress has to be put at the service of social and ecological advancement. Productivity gains must be adequately deployed for the good of local parties involved and subsequently for the society as a whole. Accordingly, foreign trade must be built upon intact domestic structures and be committed to constructively controlled international competition to generate additional prosperity and welfare through international activities. In particular, the dogma of global entrepreneurial expansion, including the elimination of competitors and the misconception of unlimited output growth, has to be replaced by a policy of shaping subsidiary structures of production and inducing growth of process and product quality.
7. The Book as a Supplement to the Compendium
Monsenstein & Vannerdat
The book is written in German, but here is a translation of the blurb:
»Does global free trade with its ›natural compulsions‹ in fact lead us into a better world? Or is ›free trade‹ just an euphemism for selfish market conquests? Gerd Zeitler analyzes with economic perspicacity how our society and our basis of life are destroyed by the strive for economic hegemony. And he outlines a path to a sustainable economic system. A system that is committed to conducive competition and beneficial foreign trade. This book is a confession for market economy and democracy and a unique guide for turning back from the neoliberal dead-end.«
You can search for keywords in my book and read texts with the online full-text search:
Or you can download the complete manuscript as a PDF:
Note on the COVID-19 Pandemic
The pandemic has noticeably revealed the significant weaknesses of the neoliberal economic system for everyone, above all the shortage of medical, but also other products, caused by disruptions in the absurdly networked value and supply chains across the globe.
The analyses of the neoliberal system as well as the principles and practical procedures based on them for building a sustainable system, which are presented in this compendium, thereby obtain an unexpected topicality. Now is the time to seize the opportunity and build up economic policy pressure to enforce the development of an economic order that is sustainably oriented towards social and ecological welfare.
The following article refers to the targeted arguments contained in the Compendium: COVID-19 and Globalization
Click here for the German-language version: Kompendium.