A social market economy is an economic system that combines free market capitalism with social policies aimed at ensuring fair competition and social welfare. It seeks to balance the efficiency of the market with the need for social justice, providing a safety net for those in need while promoting individual entrepreneurship and innovation. This model is often associated with countries like Germany, where the government plays a role in regulating the economy to prevent monopolies and protect consumers. It emphasizes the importance of both economic growth and social equity, aiming to create a stable society where all citizens can benefit from economic progress.