"A market that's as open as possible is the precondition for a successful economy, and a successful economy is the precondition to being able to pay for social security"
About this Quote
Gerhard Schroder draws a simple causal chain: the more open the market, the more dynamic the economy; the more dynamic the economy, the more society can afford robust social protections. The point is not to dismiss social security but to argue that fiscal capacity precedes generosity. Jobs, profits, and innovation expand the tax base, while stagnation shrinks the resources needed to sustain pensions, healthcare, and unemployment insurance.
The context is Germany in the early 2000s, when Schroder, a center-left chancellor from the SPD, pushed through Agenda 2010 and the Hartz labor reforms. Faced with high unemployment and sluggish growth, Germany was widely labeled the sick man of Europe. Schroder sought to liberalize labor markets, reduce non-wage labor costs, and increase competition, betting that a more open, flexible economy would restore growth and, with it, the revenues to fund the welfare state. The argument leaned on the German tradition of the social market economy: competition under clear rules, coupled with social safety nets.
Economically, the logic reflects mainstream evidence: openness tends to raise productivity and investment, spurs innovation, and integrates firms into global value chains. That growth enlarges the pie from which social insurance is paid, especially in pay-as-you-go systems reliant on employment. Yet the formulation “as open as possible” signals boundaries. Unfettered openness can also produce precarious work, wage pressure, and regional dislocation if not tempered by regulation, training, and transition support.
Politically, the claim functioned as a justification for reforms that split Schroder’s own party and alienated parts of the labor movement. Germany later reaped lower unemployment and export-led strength, but also saw a bigger low-wage sector and sharper debates over inequality. The line captures a core European compromise: prosperity through openness, solidarity through redistribution, and the sequencing that you cannot redistribute what you do not first produce.
The context is Germany in the early 2000s, when Schroder, a center-left chancellor from the SPD, pushed through Agenda 2010 and the Hartz labor reforms. Faced with high unemployment and sluggish growth, Germany was widely labeled the sick man of Europe. Schroder sought to liberalize labor markets, reduce non-wage labor costs, and increase competition, betting that a more open, flexible economy would restore growth and, with it, the revenues to fund the welfare state. The argument leaned on the German tradition of the social market economy: competition under clear rules, coupled with social safety nets.
Economically, the logic reflects mainstream evidence: openness tends to raise productivity and investment, spurs innovation, and integrates firms into global value chains. That growth enlarges the pie from which social insurance is paid, especially in pay-as-you-go systems reliant on employment. Yet the formulation “as open as possible” signals boundaries. Unfettered openness can also produce precarious work, wage pressure, and regional dislocation if not tempered by regulation, training, and transition support.
Politically, the claim functioned as a justification for reforms that split Schroder’s own party and alienated parts of the labor movement. Germany later reaped lower unemployment and export-led strength, but also saw a bigger low-wage sector and sharper debates over inequality. The line captures a core European compromise: prosperity through openness, solidarity through redistribution, and the sequencing that you cannot redistribute what you do not first produce.
Quote Details
| Topic | Money |
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