Why the market economy is the best

Problems of the social market economy

Table of Contents

• What are the problems of the social market economy in Germany?
• What are the advantages of the social market economy?
• What are the disadvantages of the social market economy?
• The conclusion

What are the problems of the social market economy in Germany?

The national debt is burdening the budget more and more and generations will have to pay off today's debts. Furthermore, globalization (low-wage countries) is a big problem,
the state is increasingly losing its influence on economic development (through the investments of large companies abroad).

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Advantages of the social market economy:

  • social Security
  • political stability
  • high quality of training
  • high purchasing power
  • high standard of living
  • motivated employees
  • high productivity
  • good infrastructure
  • Rule of law
  • Sales and investment opportunity
  • Disadvantages of the social market economy:

  • high personnel costs
  • high wage rates
  • short working hours
  • high tax burden
  • high subsidies
  • Burden by German unity and globalization
  • It follows:

    The model of the social market economy can no longer be financed. After the Cold War, globalization and technologization, more and more companies are migrating to low-wage countries. This results in rising unemployment and additional costs for social security.
    Further problems in the social market economy are the aging of society and the associated pension problem as well as a standstill in politics.

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