If anyone wanted evidence that we are not in the mental and political world of the interwar Great Depression, the German election result and its outcome - a stable government of the centre-right - should be a clincher. In interwar Germany, the Depression destroyed German democracy and led to the rise to power of Hitler and the National Socialists; in today's Germany, the most severe economic crisis since the Second World War produced the re-election of Frau Merkel.

Conventional wisdom claims that incumbent parties and politicians are punished by voters in times of economic distress.

Throughout the campaign there was never any doubt about the position or popularity of Chancellor Angela Merkel.

The interwar Depression led to the disintegration of liberal economic and political values. In Germany in 2009 not only was there was no swing to political extremism of the right: there was no sign of any support for a radical right. In the elections for regional Parliaments, the small radical right parties (which have never been a feature of national politics) simply disappeared.

The real victor of the campaign, with a vote that jumped up to 14.5 per cent and a position in parliament that will determine the shape of the new coalition government, was the heir of classic German liberalism, the FDP. It campaigned on a promise of tax reduction and of deregulation in order to stimulate the economic growth that Germany needs to get out of the economic crisis.

The real losers of the election were the Social Democrats, with a drop in support of 11 per cent that is without precedent in the very stable history of German electoral behaviour. Some on the left claim that the SPD's catastrophic result was the product of too close an engagement with liberalism and deregulation. According to this view, the party is now paying the price for Chancellor Gerhard Schroeder's successful attempts at economic reform in the early 2000's. It seems more likely that the party was punished for its lackluster electoral campaign, and for the negativity with which it tried to present the outcome of the election (the centre-right coalition) as a threat to social peace in Germany.

In the interwar crisis of democracy, participation in elections surged as voters tried to protest against what the radical parties denounced as "the system". In Germany in 2009, electoral participation fell by five per cent, to 72.5 per cent. Those voters who were disillusioned by politics simply thought that there was no point in voting.

The only point in common with the interwar results seems to be that economic crisis then as now strengthened the radical left. But what a difference! Then there was a powerful communist party, closely aligned with the interests and policies of the Soviet Union. Now the party of protest is unambiguously the party of historical losers: in the East, of Germans who are nostalgic for the planned economy and society of state socialism; in the West, of critics of the SPD who lost a power struggle with Gerhard Schroeder.

It is a party with no coherent program, but rather a compendium of popular and nationalist slogans. It is a testimony of the responsibility and maturity of the German people that this miscellaneous alliance of the disaffected only attracted 12 per cent of the vote.

If the election is clearly not a victory for political and economic radicalism, it would be equally misleading to interpret it as the triumph of the free market. Throughout the campaign, there was an eerie degree of consensus about the desirability of central features of a distinctly European and more specifically German system of values.

What are those values? A social market economy, rather than unbridled market capitalism; an export economy built on a large and technically innovative manufacturing base; a large network of small-and medium-sized enterprise, often family-owned, that is open to the global economy; a sense of environmental responsibility; and a suspicion of financially driven Anglo-Saxon style globalisation and corporate capitalism. Indeed the sense that Germany had the opportunity to show off the unique strengths of the "German model" was a key to Ms Merkel's appeal, and she repeatedly noted what a tough line she had taken against the position of banks.

In coming years, the German government is likely to be more vocal in European and global debates. It is likely to present the German model as something that corresponds more closely to what the world needs in the aftermath of the financial crisis.

Financial activity was concentrated largely in what the Europeans termed "Anglo-Saxon" economies: above all the United States and the United Kingdom, and a few small countries that tried, disastrously, to replicate a model of free-for-all finance such as Iceland and Ireland. But the emerging markets that drive globalization in the early twenty-first century have a similar mix of export orientation and a prominent industrial base of small and medium-sized and frequently family-owned enterprises. They have the problem today of trying to reconcile dynamic growth and social cohesion that was the problem of Germany in the past, and to which the German social model was and is held up as the answer.

Ms Merkel's new coalition will sit neatly alongside the new Japanese government of Yukio Hatoyama, which is also dedicated to finding a new and peculiarly Japanese model of economic growth.

These new national visions of economics in the 21st century are not simply turning in on themselves, or embarking on aggressive campaigns driven by xenophobic and racial nationalism - that was the world of the 20th century. In the world of the 21st century, models of social organisation have to persuade rather than conquer. The world looks for local or national solutions to global problems. Frau Merkel won the election because she formulated a clear answer.

The author is Professor of History and International Affairs at Princeton University, and author of The Roman Predicament.

© Project Syndicate, 2009.