Introduction to a Social Market Economy

Many times we are asked what our ideology as PDP is and we tell people that we are Social Democrats. Although popular, this term is at times not well understood. Social democracy has become popular with post liberation struggle opposition political parties in Africa as they seek to offer new alternatives to the failed socialism paradigm of liberation struggle political parties.

Vince Musewe PDP Secretary for Finance and Economic Affairs

Vince Musewe PDP Secretary for Finance and Economic Affairs

The post liberation phase in Africa, especially in Zimbabwe in particular, has unfortunately seen a predatory liberation struggle elite emerge which has embraced capitalism while claiming to be socialist. This has created wealth for a few and disillusionment and hopelessness for the majority who continue to be economically and politically disenfranchised.

Raw capitalism might deliver high GDP growth rates, but it is not ameliorating the socio economic conditions of the majority and therefore our economic philosophies, structures and social systems must be re-configured even re-invented if we are to transform our economies in Africa as a whole.

The common response to the lack of economic transformation has been the promotion of black economic empowerment or indigenisation, as we call it here in Zimbabwe. However, this again has turned out to be a mere re-labelling of black capitalism where, once more, the political elite and a comprador bourgeoisie have been the main beneficiaries. It is clear, therefore, that post-independence wealth redistributive policies are unfortunately neither creating any new wealth for the majority nor are they socially protecting the marginalised and those who need welfare. This has to change and we, at PDP as social democrats, have now come to offer Zimbabweans hope and the appropriate solutions.

It is therefore important that Zimbabweans understand what we as PDP mean when we claim to be social democrats. As PDP our mandate is to create a growing and highly productive economy and thus afford as many Zimbabweans as possible access to new wealth creation opportunities while providing a stable macro-economic environment and the necessary social safety nets for those that require social protection. We seek to create inclusive economic growth with social equity and economic justice as was the stated objective immediately after our independence in 1980.

In the next few weeks, for the benefit of our readers and for the avoidance of any doubt amongst those who may wish to understand our economic policy positions, we will be unpacking the idea of what a social market economy is as this is essentially the socio-economic paradigm which underpins social democracy.

A social market economy puts at its centre human dignity, justice, subsidiarity and solidarity. It is democratic in nature, liberal in approach, efficient in the management of resources and in producing goods and services, is concerned with the environment, is social with regard to its re-distributive intent and is ethical in its principles and values. (Democratic, liberal, efficient, environment, social and ethical are the key attributes.)

Under a social market economy, economic democracy is achieved through creating a competitive economy where citizens are able to express themselves freely as employees or employers and also as consumers. In other words, as PDP, we want to create economic freedom where Zimbabweans can pursue whatever economic activity they may desire in a well regulated competitive environment. We will reduce unnecessary state interference in citizens’ lives and act as a facilitator to create an environment conducive to the pursuit of unhindered but responsible ambition and wealth creation by all Zimbabweans regardless of race, gender or ethnicity.

Economic democracy also applies to consumption. We will create empowered and informed consumers who may freely choose to consume whatever goods and services they desire. A social market economy must also be liberal in the sense that it must create an economic environment where individuals are empowered to contribute to the emergence of an increasingly prosperous society. This is the economic freedom we talk about.

A social market economy also seeks to manage and use resources optimally to the benefit of society while taking into account and protecting the environment. In this age of climate change this is a critical if we are to create a sustainable and inclusive economy going forward.

Once we have created increasing national wealth, it will be important for us to embark on policies that are socially re-distributive so that all Zimbabweans may benefit from the prosperity which we create and we can afford as a country to look after those that face continued deprivation, children, the unemployed, child-headed families, single mothers, the elderly, pensioners and the sick among others. We have to create solidarity and build new stable caring communities.

A social market economy also requires high ethical standards and expects citizens to do same. As PDP we intend to engender a new value system based on inclusivity, accountability, responsibility and good governance. Here we will deal decisively with corruption, abuse, crime and other social ills. However it will be important for individuals themselves to also take responsibility for ethical behaviours starting at community level.
In a nutshell these are the key principles that drive social democracy and a social market economy.

So when we call ourselves social democrats, we are in fact saying as PDP we seek to create a new social market economy that puts human capital at the centre and creates the necessary economic freedoms and institutions which ensure that our society in general enjoys these freedoms and prospers while creating the necessary social safety nets for all citizens so that they may share in the prosperity of our country.

For the next few weeks we will go further and explain a social market economy when it comes to private ownership of the means of production, rules based competition, a stable monetary system, the goal of high employment levels, fair distribution of income, fair distribution of wealth, the importance of regional integration, and dealing with climate change as these are the key components of a successful social market economy.

(The source of the ideas shared herein is the book-The Social Market Economy-what does it really mean? by Siegfried F. Franke and David Gregosz  and Published by the Konrad Adenauer Foundation Japan Office (KAF.2013))

Another Zimbabwe is possible!
Vince Musewe

Post published in: Opinions

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