The Social Market Economy
Europe and Italy

After the European Council that was held in March of 2000 in Lisbon, heads of State or government have started the so-called "Lisbon Strategy," with the aim of making Europe the most competitive economic area in the world and reaching full employment within 2010. Over the years, this ambitious strategy has been developed, and today we can say that it is based on the following three pillars:

  • An economic pillar that must prepare a transition to a competitive, dynamic and knowledge-based economy. Emphasis is placed on the need to adapt constantly to evolutions in the information society and on the need to encourage initiatives in research and development
  • A social pillar that must allow the European social model to modernize by investing in human resources and struggle against the social exclusion. State Members are invited to invest in education and training and to conduct an active policy for employment in order to facilitate the transition to a knowledgeable economy
  • An environmental pillar added on the occasion of Gothenburg European Council in June 2001 and that attracts attention to the fact that economic growth must be dissociated from the use of natural resources. (http://europa.eu/scadplus/glossary/lisbon_strategy_it.htm)

With specific reference to the first pillar, it is a widespread opinion among jurists and economic historians that the process of European unification, the establishment of "independent authorities," and the birth of an economic area by the principle of competition, which from Rome, through Maastricht, comes to Lisbon, has received a strong impulse by reflection of so-called German "ordoliberals" in the first half of the twentieth century.

Some jurists have affirmed that the economic ordoliberalism theory, the social market economy, will be the foundation of the European Community.

Facing the competitive market issues with an "institutional approach" was the most important contribution given by ordoliberals: the competition order is in itself a "public benefit" and as such should be protected. This constitutional perspective of the market approaches the ordoliberals of the Freiburg School of institutional research by James Buchanan, who has universalized the liberal ideal of voluntary cooperation, transferring it from market decisions to the institutional choices.

Establishing a satisfactory order of freedom and equality is the social market main issue. In the program of Ludwig Erhard, Minister of Economy and Chancellor of the Federal Republic of Germany, who contributed most in the political field to the translation of ordoliberal principles into policies that conform with the theory of competitive market, the social economy is the goal that is achieved through the market, which operates as a medium: the market is always a mean, never a sake. Erhard’s conception, but before him of Eucken, of Röpke, Grossman-Dörth, Böm, of Rustov and of Adenauer, of a social market economy is structured on the following points: 1) to prevent the political power of being the source of arbitrary power 2) to suppress any monopolistic structure 3) to make the freedom and competition prevail. It’s interesting that the sequence and the meaning of this program meet the conditions for an orderly political and economic system recommended by Pope John Paul II in Centesimus Annus, paragraphs 19 and 42 and by Benedict XVI in his social encyclical Caritas in veritate.

At this point the question we ask is this: if, and how, in the academic and political constituent, the contribution of ordoliberalism has breached in Italy? With some merit exceptions in the academic field, I think we can recognize that the lesson of the Freiburg School has had great success in our country. Just read what professor Tommaso Padoa Schioppa wrote: "The rules of the economic relationships contained in the first part of the Constitution of 1948 are largely inspired by the idea that public institutions must have an active role in the economy." Padoa Schioppa says that a negative opinion comes up against the market--considered inherently "anti-social"--and a positive attitude against government intervention--deemed "inherently beneficial." The dean of Italian economists, professor Alberto Quadrio Curzio, says that, "between the liberal approach in favour of the regulated market of the western democracies and the communist-socialist approach, in favour of Eastern planning, prevailed an intermediate line advocated mainly by Catholics: in the intent of others that line could be folded, if events would permit, towards the solution of planning and, in extreme case, the collectivist solution."

An opinion just as radical about the insensibility of a significant part of the Founding Fathers against the market is expressed by Giuliano Amato, who writes: "against the market it (the Constituent Assembly) warns in the same moment that it defends him ( . . . ) being largely insensitive to many reasons for which it is right and deserves it." The outcome will be an economic Constitution, which oscillates between a kind of neo-corporatism and a disguised dirigisme.

Those were years dominated by Keynesian vulgate; nobody would have questioned the model of State Holdings and ordoliberal cautions and fears for bureaucracy and of monopoly and their anti-stalinism recipes, inspired by Luigi Sturzo ideas, seemed unnecessarily ballast in their eyes inevitably slowed down the economic cycle grafted by reconstruction.

This distrustful culture of the market, statist and unaware of the opportunities for the weak that the competition can offer, will in fact defeat the process of European unification. Article numbers 85, 86 and 90 of the Treaty of Rome in 1957, now numbers 81, 82 and 86 of the Maastricht Treaty, affirmed the principle of competition as the hermeneutic key expressing the European economic identity: the ordoliberals would use the term "Economic Constitution"; Centesimus Annus speaks of the legal framework to regulate the market. It prohibits agreements between undertakings, including their associations, as it has banned all those practices which undermine the market and restrict or distort competition, also it sets out the irreducibility between the presence of any companies that abuse their dominant position and the principle of competition.

It is true, then, that the application of "ordoliberal" theories arrived in Italy recently and indirectly. However, we cannot recognize that Ordoliberalism profoundly influenced a large section of Italian political and economic culture. In particular, we believe that Luigi Sturzo was able to express the social philosophy of our authors in an original and clear way. Returned from a long exile (22 years), Sturzo has begun to publish articles in newspapers and magazines in which he criticized the statist climate of those years. A climate that resulted in governmental and parliamentary orientations in favour of a governmental intervention in the economy. Orientations in sharp contrast to the social market economy and that "economic personalism" that Sturzo defended and promoted until the end of his long and proven earthly journey.

Flavio Felice is an adjunct fellow at AEI and the president of the Acton-Tocqueville Studies Centre.

Translation by Francesca Lazzeri.

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