The social market economy was designed to pacify class conflict adaptively.
Evidence
Indeed, two methodical principles determined the ultimate conceptual development of the social market economy: its evolutionary moment and the so-called irenic (meaning placatory or conciliatory) formula. In this sense, the original version of the social market economy represents an economic concept based on the German variant of neoliberalism, but yielding to political exigencies all the way down its historical path. The irenic formula provided the ideological support deemed necessary to pacify looming class conflict. Yet, Müller-Armack was well aware that the irenic formula would not endure forever as a general conception without continuous adaptations to changing socioeconomic realities and shifting configurations of power. A certain dexterity was required in order to address, preempt, or even dissolve emerging structural conflicts: “Of course, the tense situation, likely to arouse social conflicts, is subject to historical change and requires us to look for respective strategic formulas of this irenic balance again and again. Therefore, the social market economy is,” as Müller-Armack summed up the irenic idea in the early 1960s, “a strategy in the societal sphere; if it is successful and reaches its aim may never be decided exactly” (1962, 13; emphasis added). — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 555
Categorization
- DEFINE: Defines the ‘irenic formula’ — the placatory, conflict-pacifying ambition at the heart of the social market economy.
- XREF: connects to: Modern economics replaced the class-conflict lens of classical political economy with individualist harmony — Clara E. Mattei, Escape from Capitalism, 30; Ordoliberalism modernized liberalism while keeping its economics classical and supply-side. — Mark Blyth, Austerity: The History of a Dangerous…, 373; Three invariants define the social market economy’s pragmatic core. — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 556
Broader Connections
- Modern economics replaced the class-conflict lens of classical political economy with individualist harmony
#corroborates(0.80) — Clara E. Mattei, Escape from Capitalism, 30 - Ordoliberalism modernized liberalism while keeping its economics classical and supply-side.
#expands(0.80) — Mark Blyth, Austerity, 373 - Three invariants define the social market economy’s pragmatic core.
#expands(0.80) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 556