ABSTRACT
The global economy has demonstrated that a planned economy run by state bureaucracy cannot compete with America’s torpedo capitalism. But it has also demonstrated the inferiority of a welfare-oriented market economy overburdened by the costs of an expansive state welfare system. Gerhard Schroder was aware that Germany’s once dynamic economy would stagnate and that the high unemployment rate could not be combated if there were no radical reforms. The leaders of both the former Soviet Union and Social Democrats have accepted capitalism as the universal social order. They have acknowledged rules of its game and accepted competitive challenges that the late twentieth century poses. The experts warn against intervention on foreign exchange markets since it would further hinder the growth of confidence. They also criticize the goal of the European Central Bank to set a unified interest rate for the entire Euro zone that would ignore structural and economic disparities. A unified interest rate would act like a straitjacket, hindering rational policymaking.
