1. SOCIAL MARKET ECONOMY PRINCIPLES ROLF HASSE, HERMAN SCHNEIDER, KLAUS WEIGELT INTAL & LARGOZA

2. SOCIAL MARKET ECONOMY PRINCIPLES - IN THE REUNIFICATION OF THE FRG AND GDR IN 1990, BOTH PARTIES CONTRACTED AN AGREEMENT ON MONETARY, ECONOMIC & SOCIAL UNION AS AN ECONOMIC ORDER -A MARKET ECONOMY BASED ON SOCIAL PRINCIPLES WHICH ALSO SERVES AS A BASIC MODEL OF SOCIETY -COMBINES THE PRINCIPLE OF A FREE MARKET WITH THAT OF SOCIAL BALANCING -CONCEPT OF HUMAN LIBERTY COMPLEMENTED BY SOCIAL JUSTICE AS FRAME OF REFERENCE

3. - SOCIETY ORIENTED THEORY OFLIBERALISM WITH THE UNDERLYING IDEA OF FREEDOM, AS WELL AS ETHICALLY ORIENTED SOCIAL PHILOSOPHIES WHICH PROVIDE A BASIC UNDERSTANDING OF SOCIAL JUSTICE BASIC VALUES OF LIBERTY AND JUSTICE REPRESENT TWO SIDES OF A RELATIONSHIP WHOSE TENSION HAS TO BE MAINTAINED AND TOLERATED (NOT TO PUT TOO MUCH STRAIN ON ONE SIDE AND NEGLECT THE OTHER) - NOT A COMPROMISE BETWEEN LIBERTY & SOCIAL JUSTICE, RATHER BOTH VALUES STAND IN COMPLEMENTARY RELATIONSHIP WITH EACH OTHER – (MULLER-ARMACK CONSIDERS THIS AS A DIALECTIC)

4. SME : CONCEPT OF MAN -HUMAN DIGNITY IS INVIOLABLE -THE DIGNITY OF EVERY MAN IS SACROSANCT (INDEPENDENT OF RACE, RELIGION, SEX OR DISABILITY) -ACCEPTANCE OF THE PERSON AS ONE IS : RESPECT FOR DIGNITY – TRYING TO CHANGE PEOPLE FROM AN EXTERNAL CRITERIA OR BY PRESCRIBING MISSION IN LIFE ROBS PEOPLE OF THE NATURAL GIFTS OF FREEDOM & RESPONSIBILITY, MAKES THEM IMMATURE & DEPENDENT, & ROBS THEM OF THEIR LIFE’S DEEPEST MOTIVATIONS -HUMAN BEINGS HAVE DIFFERENT IDEAS, INTERESTS & OPINIONS -PERSONAL HAPPINESS IS PERMISSIBLE, AS LONG AS SOCIAL RESPONSIBILITY FOR ONE’S FELLOW MEN IS SUFFICIENTLY ACCEPTED TOO

5. SOCIAL JUSTICE - ITS GOAL HAS TO BE INTIMATELY LINKED TO AN OBJECTIVE BASED ON HUMAN DIGNITY AND THE CONSTITUTIONAL CONCEPT OF MAN THE POLITICAL & LEGAL ORDER OF ECONOMY & SOCIETY CONTRIBUTE TO THE PROTECTION & DEVELOPMENT OF THE CONCEPT OF MAN

6. PHILIPPINE CONTEXT - DEREGULATION & LIBERALIZATION (WASHINGTON CONSENSUS) HAVE NOT IMPROVED EQUITY IN THE PHILIPPINES SOCIAL MARKET ECONOMY BASED ON GERMAN MODEL: -GUARANTEES THE FLOURISHING OF HUMAN INITIATIVE WHILE AT THE SAME STRENGTHENS INSTITUTIONS & GOVERNMENT AGENCIES TO ENSURE SOCIAL PEACE -THIS IS DONE BY EMPHASIZING SOCIAL POLICY (TO PROTECT VULNERABLE SECTORS) AND MACROECONOMIC STABILIZATION (TO PREVENT THE TWIN RISKS OF INFLATION & UNEMPLOYMENT) -ENCOURAGE PRIVATE INITIATIVE IN THE INTEREST OF THE ECONOMY WHILE AVOIDING UNDESIRABLE SIDE-EFFECTS SUCH AS THE DESTITUTION OF SOME SOCIAL GROUPS

7. THE ORGANIZING PRINCIPLE IS THE ACCEPTANCE THAT IN THE LONG RUN, SOCIAL SECURITY AND EQUITY ARE IMPOSSIBLE WITHOUT ECONOMIC EFFICIENCY – LIKEWISE, ECONOMIC EFFICIENCY CANNOT BE SUSTAINED IN THE LONG RUN WITHOUT A REASONABLE STANDARD OF SOCIAL SECURITY THE PRINCIPLE IS BROKEN INTO THE FOLLOWING : 1.COMMITMENT TO SOCIAL EQUALITY – EVIDENCED BY INSTITUTIONALIZED SOCIAL POLICIES 2.COMMITMENT TO SUBSIDIARITY – PERMITS GOVT. INTERVENTION ONLY WHEN PRIVATE SECTOR CANNOT PRODUCE THE BEST RESULTS – THIS DOES NOT MEAN AN ABSENT GOVT. – PRESERVE EFFICIENCY WHILE PREVENTING DISTORTIONS & RED TAPE IN LARGE BUREAUCRACY 3.COMMITMENT TO MARKET CONFORMITY – ALL GOVT. INTERVENTION IS PRO-COMPETITIVE & DOES NOT DIMINISH PRIVATE INITIATIVE

8. EAST ASIAN MODEL: 1.HIGH IMPROVEMENT IN HUMAN CAPITAL 2.OPENNESS & EXPORT ORIENTATION THAT ALLOWED FOREIGN INVESTMENT TO PROPEL ECONOMIC GROWTH (HOWEVER THERE IS WARNING THAT THE OPENNESS DOES NOT CREATE ITS OWN SUCCESS.) 3.SOCIAL PROTECTION THROUGH EXPENDITURE PROGRAMS 4.IMPROVED GOVERNANCE THROUGH PROFESSIONAL BUREAUCRACY

9. PHILIPPINE STYLE SOCIAL MARKET ECONOMY -THE OTHER MODELS SHOW THAT FOR DEVELOPMENT TO BE MEANINGFUL & EMPOWERING, IT MUST BE ROOTED IN THE PECULIARITIES OF A SOCIETY’S HISTORY & ITS OWN VALUE SYSTEMS -MERELY TRANSPLANTING POLICIES & SOCIAL ARRANGEMENTS IS NOT LIKELY TO RESPOND TO BASIC NEEDS & GENERATE SUPPORT - MUST BE BUILT BY PARTNERSHIPS AMONG THE KEY SETORS OF SOCIETY – MUST CAPTURE NATIONAL ASPIRATIONS & AT THE SAME TIME SPRINGS FROM INDIGENOUS VALUES

10. -WE CAN USE ELEMENTS OF OUR CULTURE TO DETERMINE WHAT WE AS A NATION VALUE -IMBUES RELATIONSHIPS WITH HIGH DEGREE OF UNSTATED OBLIGATION – OBLIGATION TO BE “MAKATAO” – NOT THROUGH SET STRUCTURES BUT THROUGH RELATIONSHIPS MANY OF WHICH ARE INFORMAL -IN SMALL HOMOGENOUS COMMUNITIES, THIS CAN FORM THE BASIS OF STRONG, RELIABLE, LASTING SOCIAL BONDS THAT LESSEN TRANSACTION COSTS – CHALLENGE IS TO ADOPT THESE TO MODERN SOCIETY WHERE PEOPLE ARE MOBILE AND TRANSACTIONS ARE INCREASINGLY IMPERSONAL -NOT ALWAYS CAPTURED IN LEGAL CODES NOR THE WESTERN STYLE LEGALISM * CHALLENGE : HARNESS THE MATRIX OF CULTURAL VALUES IN A WAY THAT MEETS MOST PRESSING DEVELOPMENT NEEDS & EQUIPS US TO DEAL WITH THE PROBLEMS OF COMPLEX, OPEN, MODERN SOCIETY

11. FEATURES OF RP-STYLE SOCIAL MARKET ECONOMY: 1.MACROECONOMIC STABILITY BASED ON FISCAL DISCIPLINE AND STRATEGIC INVESTMENT, BOTH ARE SHAPED BY A CONSENSUS ON GOVERNMENT’S, BUSINESS’, AND LABOR’S ROLES IN DEVELOPMENT 2.COMPETITIVENESS BASED ON INDUSTRIES THAT TAP NATIONAL RESERVES OF HUMAN & CULTURAL CAPITAL 3.SOCIAL PARTNERSHIP ACHIEVED THROUGH NORMS & INSTITUTIONS THAT AFFIRM, ENCOURAGE, DEEPEN HUMAN RELATIONSHIPS 4.IMPROVED GOVERNANCE & LEADERSHIP BASED ON A TRUE SOCIAL CONTRACT

12. Robust and Equitable Philippine Development Strengthening Social Partnership For Productivity, Firm Competitiveness and Workers’ Welfare Stable Macro economy Dynamic Market Competition High Investment and Saving Outward Orientation Human Capital Deepening Technological Upgrading Improved Logistic Services Institutions/Governance Culture Features of an RP-style social market economy