ECONOMIC  Systems

The German system (type)

The German System (Type)

This mode of organizing economic activity centers around Germany but also includes countries such as the Netherlands, Switzerland, and Austria. It is the "sober" model, emphasizing maximum efficiency and long-term objectives. It is a capitalism that aims to achieve collective well-being through policies founded on consensus, balance, and justice.

In comparison to the American (Anglo-Saxon) model, it signifies:

a. strong banks, with almost total independence from political power (the German bank is an integrated institution: it handles all financial aspects of businesses, relieving industrialists or traders of this burden, and shows interest in the sustainable development of enterprises, manifested through support for large-scale business, long-term profit planning, and shareholder stability);

b. a special relationship between the market and state interventionism (the state is involved in economic organization as well as social regulation);

c. accents of nationalism in economic and social policy;

d. a heightened concern for combating poverty, particularly through social assistance;

e. an emphasis on the future (diligence and saving are valued virtues at the macro level; a high saving rate indicates care for younger generations, as well as concern for large-scale investments);

[see: Ion Pohoață – op. cit., p.129 and following]

Important to remember:

German enterprises do not develop superficial extra-economic relationships with their employees. For them, the criterion of economic efficiency only makes sense when combined with that of social harmony; as such, enterprises can be viewed not only as instruments for maximizing profit but also as creators and maintainers of jobs.