Calibrated Capitalism is a concept that stems from a drive to solve existing problems within Europe's economic system. Existing research indicates that the post-2008 economic framework is largely a remnant of the 'neoliberal' model that dates back to the Cold War. Within this framework, economic progress and human prosperity has been achieved ... to some extent. Yet there are plenty of unaddressed issues in this model, which include human rights abuses, systemic risk accumulation in banking and increasing levels of populism. 

In conclusion, the system is non-ergodic as its assumptions regarding rationality do no longer add up to the physical reality of its participants. Somewhere there is a 'blockage' within the system vis-a-vis natural law and the individual that will have to be addressed, i.e calibrated to support long-term peace and prosperity. That is the main objective of Calibrated Capitalism. This could make a difference between having a functioning EU or not having an EU anymore due to attempts by illiberal forces to dismantle it. State capture has to be taken into account more than currently is the case. 

Such distortions are problematic on several counts: i) Fueling corruption ii) Potentially causing human rights issues iii) Destabilizing the level playing field iv) Creating biases in the flow of information. In this context, a free market is understood as one with an optimal flow of information. 

A more accurate description would be social market economy. This concept has been adopted by the EU already. Yet the 'Calibrated' part consists in protecting this infrastructure and strengthening it, while containing rough edges in the existing capitalist framework. In this process, the French Revolution and the Enlightenment provide an important building block, in this context it is important to liberalise  those aspects of the market and society that have not been captured well by these two building blocks.

Three dossiers in particular form the basis for this concept and attempt to identify failures in the existing model: The Panama Papers, Egrant Inquiry (still pending) and Parex scandal. Central to Calibrated Capitalism is the idea that the Euro should radically account for 'bounded rationality' to be a success, so that each Member State and each individual citizen can be the best version of itself. 

The concept social market economy is was coined by Chilean economist Rolf Lüders. He refers to it as the  stage of Chile's economic model at the time when democracy was restored. Yet the earlier, radical neoliberal variant which was introduced under highly repressive circumstances, has shown to be more problematic in its functioning, resulting in a major credit boom in 1983 in Chile. This can be thought of as the variant in which rough edges are not removed and instead given unconstrained reign over society. This variant contains a more illiberal edge in which power structures reside that can have a more adverse impact on the visible, liberal democratic part of the system.