Mixing social democratic values with Jimmy Stewart localism, Germany’s economy is running rings around America’s. “What we have here is stakeholder capitalism, not shareholder capitalism,” says Hubner. And like most mittelstand [i.e., a family-owned small and mid-size manufacturing firm] owners, he adds: “I live where my company is located. I want a good image in the town I live in.”
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I’ve long been intrigued by the “social market” model that prevails in Germany, which seems to provide a genuine third way between socialism and American-style devil-take-the-hindmost capitalism–one that prizes solidarity and stability over “creative destruction.” It also seems to be different in important ways from the much-touted “Nordic” model, which combines relatively light market regulation with a generous welfare state and a strong commitment to individual autonomy. U.S. conservatives and libertarians have a habit of yelling “Socialism!” at any departure, no matter how minor, from laissez-faire purism. But the fact is, there are many different models of workable mixed economies, some of which seem to outperform the U.S. model when it comes to equity and well-being. This isn’t to deny that there are trade-offs and that these models also have their problems, but if Americans were more informed about these other models, we might make better political choices.