Prof. Dr. Thomas Hartmann-Wendels: “What would Erhard say?”

The Seven Deadly Sins to the Market Economy

The financial crisis is being interpreted as a failure of the market economy. The market economy, it is claimed, leads to greed for profit; instead of prosperity for all, it leads to extreme wealth for the few and unemployment and social decline for the many; rather then security, it produces crises; rather than sustainability, it promotes short-term thinking.

The debate on the market economy is necessary, for the market economy is not an end in itself, but should help people to achieve freedom and economic welfare. At first glance, it seems as if the financial crisis exposes the weaknesses of the market economy, but a closer look shows that it was in fact violations of market principles that caused the crisis.