• Prof. Marcel Fratzscher

Everyone has to be able to participate.

A letter from ... Professor Marcel Fratzscher. The head of the DIW sees the current justice debate as misguided and calls for an inclusive social market economy.

"Time for Justice" was the motto of Martin Schulz's election campaign. In a country where 70 per cent of people feel that inequality is too high, this slogan may catch fire. I still think: Wir need a debate that goes beyond justice.

Justice is something subjective. When parties talk about "justice", they are usually concerned about the interests of their own constituencies. They try to mobilise potential voters for themselves with election gifts - through promises that are usually disappointed in the long run.

A further polarization of society is thus programmed. The controversy over tax cuts or increases is creating rifts between rich and poor. In the debate on pensions and private provision, old people and young people face each other. The debate about spouse splitting and child benefit divides society just as much as the discussion about demanding and promoting migrants. And the dispute over wages and taxation polarises between workers and entrepreneurs.

Germany has no fundamental problem with a welfare state that is too small or a tax burden that is too unequal. On the contrary, hardly any other country in the world has such a strong and efficient welfare state as Germany.

Nevertheless, the inequality of opportunities, income and wealth in Germany has reached a harmful level. It reduces productivity, growth, health and innovation - and ultimately the prosperity of all. Taking care of it would be the right approach;

We Germans are rightly proud of our social market economy. Its success was based on the fact that it did not see the strong welfare state, a high degree of individual responsibility and functioning markets as a contradiction, but as prerequisites for prosperity and social cohesion. Today, Germany is further away than ever from this ideal. More and more people are losing their economic independence and becoming dependent on the state. One in three households in East Germany now receives half or more of its income from the state. And social mobility is low - those who are born into a socially weak and uneducated family find it much more difficult than in the past to obtain good education and training and to achieve advancement.

We therefore need a new social contract that reconciles the social with the market economy not only for a few but for as many as possible - an inclusive social market economy. And no envy debate.

Such an inclusive social market economy creates prosperity for all. People who get a good education, develop their talents and use their skills, which are promoted in the labour market and socially secured, do not only help themselves, they also contribute to the economy and society for the benefit of all. Companies benefit from better-qualified and well-paid workers, as do the employees themselves. And the state can levy less tax and better fulfil its social security role if more people (can) take personal responsibility and are no longer dependent on social benefits.

To achieve this, five things have to happen. An education offensive must improve the quality of early childhood education in particular, but also the school system and open it up to more children. Family policy must create opportunities for women, single parents and socially weaker people. Labour market policy must take greater account of the forgotten issues of past reforms - the long-term unemployed, people with health problems, immigrants. A fundamental tax reform must abolish privileges and thus ensure more market and competition. And social systems need to be much more focused on those people who need help.

"Time for justice" is a nice campaign motto. But Germany does not need a nice motto, no election gifts and no competition about the best definition of justice. It requires a return to the strengths of the last seven decades: ownership, a strong welfare state and a functioning market economy. ®

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