PERSPEKTIVE| FES LONDON An Industrial Policy for Social Democracy Cornerstones of an Agenda for Germany ALFRED PFALLER AND PHILLIPP FINK November 2011  An industrial policy that is based on social democratic values has to be commited to both economic prosperity and social welfare of people. Therefore, it has to combine a powerful, competitive economy to generate growth and material prosperity with a system of fair wealth distribution and environmental protection.  The industrial policy for social democracy has to adjust to changing market conditions as well as ensure Germany’s international competitiv eness. In addition,‘green’ production and consumption patterns have to be adopted in order to avoid excessive burdens on the natural environment and to establish competitive advantages in‘ green’ markets.  Social democracy’s industrial policy must call for higher wages as these are the key to adequate participation of all people in the fruits of economic performance. Higher wages would also breathe life into domestic markets.  The change towards an economy in line with social democratic industrial policies must proceed without abandoning any so called‘losers of modernisation’.