A lesson learned in Germany from the rise of the nazi regime in the 1930s was, that there should be a social balance in society. The gap between poor and rich should not be too large as this might provide a fertile ground for the rise of extreme right or left wing policies with anti democratic implications. Every citizen of the newly founded Federal Republic of Germany should benefit from an economic stability and growth. Therefore the notion of a “Social Market Economy” was developed and implemented in the 1950s and since then it has been a success story. The notion seeks a middle path between socialism and capitalism. Social Market Economy can be described as an economic order which in a framework of market economy aims for social security and social equity by means of political intervention and measures in line with the market. It aims at maintaining the mechanisms of the free market while simultaneously ensuring social equity by keeping a balance between a high rate of economic growth, low inflation, low levels of unemployment, good working conditions, social welfare and public services by using state intervention. These ideas have had an important impact on German labour law, e.g. on the legal framework for protection against dismissal, limited contracts or social bargaining between associations of employers and trade unions. Instruments in line with the idea of a Social Marked Economy – for instance the so-called “short time workíng” - gradually helped to limit the negative effects of the present economic crisis on the German labour market. Prof. Call will give an overview of the idea of a social market economy, its historical development in Germany as well as its influence on German labour law until today.