Ordoliberalism is a school of liberalism that emphasised the need for the state to ensure that the free market produces results close to its theoretical potential (see allocative efficiency). The theory was developed by German economists and legal scholars such as Walter Eucken, Franz Böhm, Hans Grossmann-Doerth and Leonhard Miksch from about 1930-1950. Alexander Rüstow and Wilhelm Röpke (who spent the Nazi period in exile in Turkey) are associated with this theory. Ordoliberal ideals (with modifications) drove the creation of the post-World War II German social market economy and its attendant Wirtschaftswunder. In the beginning, many Ordoliberals called themselves Neoliberals (“new Liberals”) to separate themselves from old school classical liberalism. However, ordoliberals promoted the concept of the social market economy, and this concept promotes a strong role for the state with respect to the market, which is in many ways different from the ideas who are nowadays connected with the term neoliberalism.[1] The term Ordoliberalism was coined 1950 by Hero Moeller referring to the academic journal ORDO and was immediately recognized as a more accurate term.[citation needed]

Ordoliberal theory holds that the state must create a proper legal environment for the economy and maintain a healthy level of competition (rather than just "exchange") through measures that adhere to market principles. This is the foundation of its legitimacy[2] The concern is that, if the state does not take active measures to foster competition, firms with monopoly (or oligopoly) power will emerge, which will not only subvert the advantages offered by the market economy, but also possibly undermine good government, since strong economic power can be transformed into political power.[3] Quoting Stephen Padgett: "A central tenet of ordo-liberalism is a clearly defined division of labor in economic management, with specific responsibilities assigned to particular institutions. Monetary policy should be the responsibility of a central bank committed to monetary stability and low inflation, and insulated from political pressure by independent status. Fiscal policy—balancing tax revenue against government expenditure—is the domain of the government, whilst macro-economic policy is the preserve of employers and trade unions." The state should form an economical order instead of directing economical processes, and three negative examples ordoliberals used to back their theories were Nazism, Keynesianism, and Russian socialism.[4]

Ordoliberalism is centered around the academic journal ORDO. It is also associated with Alfred Müller-Armack.[5]

Wilhelm Röpke considered Ordoliberalism to be "liberal conservatism," against capitalism in his work Civitas Humana (A Humane Order of Society, 1944). Alexander Rüstow also has criticized laissez-faire capitalism in his work Das Versagen des Wirtschaftsliberalismus (The Failure of Economic Liberalism, 1950). The Ordoliberals thus separated themselves from classical liberals[2][6] like Ludwig von Mises and Friedrich Hayek.[1]

Michel Foucault also notes the similarity (beyond just historical contemporaneity) between the Ordo/Freiberg school and The Frankfurt School of Critical Theory, due to their influence from Max Weber. Broadly, this influence is in recognizing the "irrational rationality" of the capitalist system, but not the "logic of contradiction" that Marx recognized. Both groups took up the same problem, but in vastly different directions.[7] For their political philosophy, Ordoliberals were influenced by Aristotle, Tocqueville, Hegel, Spengler, Karl Mannheim, Max Weber, and Husserl.[8]

See also


  1. ^ a b Taylor C. Boas und Jordan Gans-Morse: Neoliberalism: From New Liberal Philosophy to Anti-Liberal Slogan. In: Studies in Comparative International Development. 44, No. 2, 24 October 2011, ISSN 0039-3606, p. 137–161 (doi:10.1007/s12116-009-9040-5).
  2. ^ a b Megay, Edward N. (1970). "Anti-Pluralist Liberalism: The German Neoliberals". Political Science Quarterly (Political Science Quarterly, Vol. 85, No. 3) 85 (3): 422–442. doi:10.2307/2147878. JSTOR 2147878. 
  3. ^ Vatiero Massimiliano (2010), "The Ordoliberal notion of market power: an institutionalist reassessment", European Competition Journal, 6(3): 689-707. doi:10.5235/ecj.v6n3.689
  4. ^ Foucault, Michel. The Birth of Biopolitics: Lectures at the College de France (1978-9). Trans. Graham Burchell. Ed. Michael Senellart. 1st Picador Paperback Edition. New York: Palgrave MacMillan, 2010, 107-10.
  5. ^ Foucault, The Birth of Biopolitics, 103.
  6. ^ Friedrich, Carl J. (1955). "The Political Thought of Neo-Liberalism". American Political Science Review (The American Political Science Review, Vol. 49, No. 2) 49 (2): 509–525. doi:10.2307/1951819. JSTOR 1951819. 
  7. ^ Foucault, The Birth of Biopolitics, 105.
  8. ^ Foucault, The Birth of Biopolitics, 103-105.
  • Alan Peacock and Hans Willgerodt (eds): Germany’s Social Market Economy: Origins and Evolution, Macmillan

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