Alfred Müller-Armack – der Schöpfer des Begriffs “Soziale Marktwirtschaft”

After the Second World War centralized economic planning was seen as more or less unavoidable for economic recovery in most European countries including West Germany, with its destruction of all kinds and millions of destitute refugees. But as early as in 1945 Alfred Miiller-Armack proposed quite another remedy for recovery: West Germany should abolish its repressed inflation by a currency reform and at the same time return to a market economy. He called his concept “Social Market Economy” as a new type of economic order. It was intended to harmonize economic progress and free competitive markets with social stability and security in a more comprehensive sense. He became professor economics at the universities of Munster and Cologne. In 1952 the German reformer of economic policy and minister of economic affairs Ludwig Erhard appointed him as head of the department for principal issues in his ministry and in 1958 as secretary of state for European affairs. Miiller-Armack got the chance to apply his concept in political practice. This proved to be very successful, if one takes into account the difficulties and irrationalities of the political process. He became one of the leading German negotiators in the conferences establishing the European Economic Community, but resigned after de Gaulle’s veto against the admission of Denmark and the United Kingdom. The author examines in detail the controversial term “social” in Muller-Armack’s concept of a market economy. He concludes that seeming conflicts between socalled social aims and a free market can be made irrelevant to a large extent, if certain principles and limits are observed and aspects beyond supply and demand are included.