Form in much of central and Western Europe.
Its central theme is the idea of a social market: an attempt to marry the disciplines of market competition with the need for social cohesion and solidarity.

State intervention should be used to protect infant industries from the rigours of foreign competition.

- Because it places such a heavy stress on consultation, negotiation and consensus, it tends to encourage inflexibility and make it difficult for businesses to adapt to changing market conditions.
- High levels of social expenditure required to maintain a high-quality welfare provision. --> pushes up taxes.
- Critics say its nothing more than a contradiction in terms. The price of financing ever-expanding social programmes is a decline in international competitiveness and a weakening of the wealth-creating bases of the economy.