The Debate on Capitalism Models and the Social Market Economy

THE DEBATE ON CAPITALISM MODELS AND THE SOCIAL MARKET ECONOMY online publication June 2013 AUTHOR: MARCELO RESICOBRAZIL From the fall of the Berlin Wall until the beginning of the new millennium, a world developed that could be described as unipolar. In this world an extreme interpretation of the free market was established on the one hand - the notion of a market that regulates itself completely and thus goes hand in hand with an economic policy of deregulation and on the other hand confidence in the automatic establishment and spread of the democracy according to the Western model. 1 The international economic and financial crisis that unleashed itself between 2007 and 2008 largely implied a turning away from this attitude with regard to the social automatisms of history. The financial crisis, whose origins include the bursting of the mortgage market's speculative bubble This text is a working paper of the international conference "Latin America in the context of possible ways out of the global crisis", organized by the Col-legium of the National Mexican Commission for Science and Technology in Mexico, and the KAS, 28-29 February 2012. Published in: RevistaBien Común, Vol. 18, No. 211, September/October 2012. 1 El fin de la historia y el último hombrev on Francis Fukuyama (Planeta, México, 1992) gave the impulse for this vision. The economic downturn, which was the result of the deregulation of the markets, led to the so-called "great recession" of the international economy, which clearly revealed the deficits of an economic model based on the deregulation of the markets. Under this paradigm, the regulation of the economy - in particular the financial markets - and the protection of competition were relaxed to a large extent, there was an economic concentration of wealth and equity, and a financial system emerged that was susceptible to recurring and systemic crises. 2 As a result, today we are confronted with a deterioration of social standards - especially in the developed countries - and a destabilization of social and democratic values in various countries, which at the same time have led to a long-term process of revival of a bipolar world in which competition between national or socio-cultural models of capitalism takes place. The models of capitalism become 2 See also Marcelo Resico, (2002) "Crisisen la nueva economía", Revista Valores FCSE-UCA, December, No. 55; and "Lacrisis financiera y el debate sobre las regulaciones," Newspaper El Economista October 3, 2008.