Is entrepreneurship and innovation inextricably linked

Law creates prosperity

"Take away the law, what is a state but a large band of robbers." - With this sentence St. Augustine expressed the importance of law over 1,600 years ago. Because without the law, our central freedoms are not protected - everything leads to chaos. The basis for entrepreneurial activity, economic growth and thus prosperity therefore include, for example, the right to property, the right to free choice of occupation, the right to conclude contracts, or the right to open and operate a business.

Without a reliable legal framework, everything that makes a successful economy is lacking: trust, reliability, performance incentives, personal responsibility. A look at other countries shows that where there is a lack of legal certainty, where corruption and arbitrariness rule, states fail and people live in poverty and insecurity. And the statement of St. Augustine comes true.

Germany, on the other hand, is a reliable constitutional state. German law is usually balanced, predictable and enforceable. Our justice system is relatively inexpensive and efficient. The established system of binding law, self-regulation and entrepreneurial freedom is part of our successful model of the social market economy. In this model, the state creates an appropriate regulatory framework for the economy through laws, guarantees a level playing field and leaves room for entrepreneurship and innovation.

Our laws enable the free choice of profession and business start-ups in various legal forms. Strong intellectual property rights protect innovations and encourage people to try, research, and market new things. However, the state also creates the framework for lively trade in which companies - secured by stable civil law - can conclude contracts with business partners at home and abroad. Above all, however, the laws of Germany create a good economic order in the sense of the social market economy, which combines the principle of entrepreneurial freedom with social equilibrium.

But the statement of St. Augustine - as true as it is - must also be viewed carefully. Because the task of creating the right regulatory framework for citizens and companies is a balancing act: If the state overdoes and regulates too much, freedom and responsibility suffer. If the state takes all risks and assumes superior knowledge, there is no room for entrepreneurship and free competition. This cannot create sustainable prosperity.

The task of the legislature is thus clearly described: It must find a balanced balance between required regulation and personal responsibility as well as between corporate autonomy and social equilibrium. The basic rule in our free democratic basic order is: Every state intervention in the freedom of citizens and companies requires justification. If possible, the state should stay out of the market. Where he deems an intervention necessary, a sound justification is required.

The balance is seldom found, however, because politicians find it difficult to resist the temptation to intervene in the market and in the companies themselves. As a result, national and European regulations are increasingly burdening the economy. This not only applies to external business activities, but also to internal decision-making processes and structures in the company. Examples are the gender quota for supervisory boards or the reporting obligations on social engagement. The increasingly detailed rules for the remuneration of board members, advertising bans and politically motivated public procurement give cause for concern.

Measures to make the legal framework for business simpler, more practical and better, on the other hand, are the exception. Politicians have a hard time with business-friendly legislation. Because it basically means that the legislature has to withdraw in favor of more market. Letting things take their course, trusting the market - it is difficult as a politician to score points with voters. Because fear of the band of robbers conjured up by Augustine always predominates - even today. The fact that less (regulation) can mean more (prosperity) in a market economy is a conviction that should regain a majority.