Transferring the Social Market Economy to the EC: A New German Methodenstreit

Abstract

The construction of the European social model (the Social Market Economy) is often approached as a gradual compromise between various political forces and currents of economic thought. This article argues that a third decisive factor also needs to be taken into greater account: diplomacy. From a historical perspective, it stresses the importance of reassessing Germany's underestimated role in the spread of liberalism within the European model. It highlights the fundamental method dispute (Methodenstreit) in German European policy from Rom to Maastricht that ended in the choice of a diplomatic strategy based on transferring the German economic and social model to the EC. Using unpublished government sources, it fills a gap between the study of the intellectual origins of the European economic and social model and its institutionalisation within the EU.