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FREE LAW JOURNAL - VOLUME 1, NUMBER 1 (18 JULY 2005)
individual is basically free in a state of the rule of law, and this freedom is indivisible, the theory of social
market economy is interlinked with the requirement of individual responsibility, creativity and individual
initiative. 34 On the one hand, social market economy as a social system is based on the freedom of the
individual, it gives freedom to the individual but entails risks as well. 35 On the other hand, it is an
organising principle without common dogmatics, it is open, tolerant and flexible, based on parliamentary
decisions and operates with acceptable compromises just as the concept of the system of the state of the
rule of law. 36 Social market economy as an economic system is much more than a mere sum of market
economy and social policy, 37 further, it is more than simple competition as well, as this concept regards
morals, honesty etc. 38 as things which are to be made part of the economic life. 39
b) According to Joerges and Rödl the model of the social market economy adopted by the TCE must have
been the German social statehood. 40 In their view those devoted to the social Europe argued for a social
market economy linguistically close to a social state, and thought it would be of constitutional and
political significance if the Convention expressly stated the Union’s intended social character by alluding
to social market economy. The authors are worried that this excludes alternative solutions by virtue of its
constitutional power, and propose that for the sake of stressing the social nature and avoiding the
problems caused by the social market economy, the Convention should have applied the term ‘social
European system of law’ or ‘social union’, or as an alternative solution it should have trusted in the
strength of the conception of ‘solidarity’, which is contained in the values listed in Article I of the TCE. 41
These concepts apparently mix with each other in the legal literature. This is the reason why it is
necessary to define these terms. Market economy and its various attributes (liberal, social, dirigist etc.)
34 An individual, having political rights and making responsible decisions, whose scope for economic action is taken away by
the central government is inconceivable in the long run, just like an individual who can make independent economic decisions
but is patronized by a political party, based on the principle of democratic centralism, operating as if it were a state. Schlecht:
Jólét egész Európának…[Welfare for the Whole Europe …] pp 17 and 108.
35 Schlecht: Jólét egész Európának…[Welfare for the Whole Europe …] p 52.
36 The system is flexible and open inasmuch as modifications and innovations are compatible with market economy and social
fairness. Dürr: The Social Market Economy in the Federal Republic of Germany. p 9, Flexibility has been realised in practice
since the opportunities provided by it has been taken by the consecutive governments. Katalin Falusné Szikra: A németországi
szociális piacgazdaság [Market Econimy in Germany]. In. Összehasonlító gazdaságtan [Comparative Economics]. Bevezetés a
gazdasági rendszerek elméletébe [Introduction into the Theory of Economic Systems]. Aula Kiadó. 1997 p 234.
37 Schlecht: Jólét egész Európának…[Welfare for the Whole Europe …] p 93.
38 The competition-oriented market economy should be saturated with social ethics so that it can deserve the adjective ’social’.
In a pure, forlorn market economy the freedom of the individual is endangered by the excessive exploitation efforts of the
economic power (cartels and monopolies). Schlecht: Jólét egész Európának…[Welfare for the Whole Europe …] pp 12 and
106.
39 The reason for this is that the market economy established and maintained according to ordoliberal principles automatically
and directly generated social impacts. See the works of Eucken and the Freiburg school.
40 The reason for the commitment to the theory of social statehood is the idea that Europe is unable to solve the problem of
democratic deficit unless it solves the social problem. Joerges-Rödl: „Social Market Economy” as Europe’s Social Model? p 2.
This concept of the social state has not got to the European level in the sense it is used by the Germans, as “this would have
entailed the presupposition that the EU was a federal state, which was unperceivable considering the consensual commitment
of the Convention (it totally refused the federal construction of the EU)”. („This would have led to the conception of the
European Union as a „state” something that was obviously impossible on condition of the chosen consensus commitment of the
Convent”….” A potential of the European Union to become a federal state was carefully excluded by the Convention”. )
Joerges-Rödl: „Social Market Economy” as Europe’s Social Model? pp 10-11. Katrougalos regards the activism of the
European Court of Justice (ECJ) manifest in the social area as a basic contribution to the constitutional acknowledgement of the
theory of the social state at the EU level, though he adds that the ECJ has not proved to be the champion of the social rights so
far as it ranks the European integration above all in its case law. Katrougalos: The „Economic Constitution” of the European
Union …p 24.
41 Joerges-Rödl: „Social Market Economy” as Europe’s Social Model? pp 10-12.
DR. TÍMEA DRINÓCZI - SOME ELEMENTS OF THE ECONOMIC CONSTITUTION OF THE EU: SOCIAL MARKET ECONOMY AND RELEVANT FUNDAMENTAL RIGHTS 69