Report on Social Market Economy and Welfare State

Introduction of Social Market Economy and Welfare State

The concepts of the social market economy can be explores in effective manners by considering and evaluating the concepts and particular aspects of the economics. To analyze this concept it is necessary to analyze the economic critically. Economics is considered as the social sciences which is required for studying the consumption, production and distribution of the services and goods.  The economics is the one of the major pillar and aspect that is particularly utilized in order to analyze the trade of the country. The particular interactions and behaviors are focused by the economic agent and it also offers the views that how the economics can work. This paper explores the two important concepts of the economic these are the social market economy and welfare states. Both of these terms and aspects are explained in effective manners by discussing its accurate definition. The most important and particular features related to welfare state model and social market economy are analyzed in this paper.

Definition of a social market economy and welfare state

Social market economy of Social Market Economy and Welfare State

SME (Social market economy) is considered as the model and the system of the economic development that is usually employed in the people of the Republic of China. This particular system is usually depends upon the predominance of the public ownership. It also includes the states that owned enterprises along with the market economy. By using the social market economy the both kinds of the market economy can be balanced in good ways. It can be presented as an unsurpassable as well as indisputable universal concept. It is also concerned with the social justice. In 1948, this economic model was implemented by the Federal Republic of Germany (Mureşan, 2014).   

Welfare state Model of Social Market Economy and Welfare State

Infect, the welfare states concept has not been defined effectively, but there are the numerous historians who had tried define the particular concepts of the welfare states. One of these is known as the Asa Briggs who would seem for grasping the essence that is quite adequately;

The welfare state is referred as the state at where the entire organized powers are used deliberately by using the administrations and politics (Stefan, 2015). It also includes the effort that is required  in order to modify the play of the market forces at least in three directions. It includes;

·         The first one is related to ensure the families and individuals by assuming their minimum income instead of their market value.

·         The second one is related to by reducing the particular extent of the insecurity that is required by allowing the families and individuals in order to meet the certain social contingencies.

·         The third one is related to by granting the all citizens without discriminations of class and status which are offered by the best standards that are available in relation to certain agreed range of social services.

Major features of social market economy and welfare state models

Social market economy of Social Market Economy and Welfare State

There are the various features of the social market economy that can be analyzed and observed in the various trudies. These are the good options to explore the concept of the social market economy. But four of these features are discussed in the paper in good way (Gil-Robles, 2014).  These are;

Individual freedom of Social Market Economy and Welfare State

It includes the Individual opportunity, moral duty and private independence versus the state and incredible intrigue gatherings, implanted into a solid common society.

Free markets of Social Market Economy and Welfare State:

Free markets, that is, working challenge, private responsibility for methods for  generation, free valuing, opportunity of agreement, private obligation, controls against imposing business models  what's more, maltreatment of intensity, free universal exchange and money related security. So, a market is free just when there are regular principles which are clear, material and give legitimate conviction (Glossner, 2014).

Solidarity and subsidiarity

Solidarity and subsidiarity can be explained with the objective that is regarding human pride and shielding social harmony through arrangements good with a working business sector just as with the standards of correspondence and sustainability.

Respect for the creation of Social Market Economy and Welfare State

It includes the respect for the creation that is held in trust for people in the future and as a typical legacy basic to the agreeable advancement of each future individual.
There are various features of the welfare states and these are;

An Instrument for Social Welfare:

According to this the welfare state is always dedicated towards the people’s welfare. It looks to offer the minimum facilities to the people. They work to remove the poverty from the region and country. They tried to reduce unemployment and hunger from their country. They create gap among the poor and rich people. It focuses on the establishment of the economic and social justice.   

A Compromise between Individualisms and Socialism:

The social welfare states always work to compare for the socialism and individualism. It offers the values for both things as individual liberty and society interest.

·         A Positive State

·         Equal Rights of All

·         Moral Development of Individual

·         Establishment of Democracy

·         Development through Planning

Challenges for both models in the time of globalization

Social welfare states model

In the time of the globalization there are the various things that can be represented as challenge for the social welfare states model (Davidescu, 2017). It can be explained in the various forms such as;

Cultural Independence and Nation States’ Economic

 The globalization can be challenging for the independence of culture as well as economics of national states. The de-regulation at the progressive level of the both external and internal financial markets in the particular leading countries is fully representing the inability of the governments in order to regulate their national economy. It also includes the competition for market increases and capital. Due to this capital the pressures is increased by the markets in order to adopt the strategy. Such kinds of the challenges are posed to welfare states by 451 of low wages. It also includes cuts in the spending of the welfare states (Shinar, 2013).  

Social market economy

The one of the most important and basic challenge of the social market economy in the time of the globalization is related to the increased in the level of stress for the competition of the world wide that can be particularly identified in good way.  From the country’s economic involvement along with lower living standards, there is particular excess for the supply of the unqualified employees.  Therefore, in Europe, the unqualified employees are industrialized the countries along with impression of soon losing their jobs.

Examples of countries that apply social market economy and welfare states models

There are the numerous countries that are usually using the social market economy. But the United States is considered as the one the best example of the social market economies. United States has free flow of goods and services.

Hong Kong is another good example of the country that is particularly suing the social market economy. It also has free flow of goods and services facilities. It also protects both consumers and producers at same time.

Singapore is the third best example for the free market economy or social market economy. Because it has no exchange of goods and services as well as governmental control.  The services are determined by the mechanism of the market for the supply and demand.

Welfare states model

The welfare of the citizens can be promoted by the welfare state model. In the modern welfare state nations all the Nordic countries are included. It includes Iceland, Norway, Finland, Sweden, Denmark and Germany. There are the three major groups of the developed welfare states; It includes; Conservatives, Liberal and Social Democratic.