Ordoliberalism

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Template:Short description Template:Liberalism in Germany Lua error in package.lua at line 80: module 'Module:Sidebar/configuration' not found. Ordoliberalism is the German variant of economic liberalism that emphasizes the need for government to ensure that the free market produces results close to its theoretical potential.[1]

Ordoliberal ideals became the foundation of the creation of the post-World War II German social market economy and its attendant Script error: No such module "Lang".. The term "ordoliberalism" (Template:Langx) was coined in 1950 by Hero Moeller [de] and refers to the academic journal ORDO.[2]

Linguistic differentiation

Ordoliberals separate themselves from classical liberals. Notably, Script error: No such module "Lang"., with Script error: No such module "Lang"., founder of ordoliberalism and the Freiburg School,[3] rejected neoliberalism.[4]

Ordoliberals promote the concept of the social market economy, which favors a strong role for the state with respect to the market and which is in many ways different from the ideas connected to the term "neoliberalism". The term "neoliberalism" was originally coined in 1938 at the Script error: No such module "Lang". by Script error: No such module "Lang"., who is regarded as an ordoliberal today.[5]

Because of the connected history, ordoliberalism is sometimes referred to as "German neoliberalism". This has led to frequent confusion and mix-ups of terms and ideas in the discourse, debate and criticism of both economic schools. In 1991 political economist Script error: No such module "Lang". published Capitalisme Contre Capitalisme, and in 2001 Peter A. Hall and David Soskice published Varieties of Capitalism, and both separated the concepts and developed the new terms "liberal market economy" and "coordinated market economy" to distinguish neoliberalism and ordoliberalism.

Development

The theory was developed from about 1930 to 1950 by German economists and legal scholars from the Freiburg School, such as Walter Eucken, Script error: No such module "Lang"., Hans Grossmann-Doerth, and Leonhard Miksch.[6]

Ordoliberal ideals (with modifications) drove the creation of the post-World War II German social market economy. They were especially influential on forming a firm competition law in Germany. However the social market economy was implemented in economies where corporatism was already well established, so ordoliberal ideals were not as far reaching as the theory's economic founders had intended.[7]

Since the 1960s, ordoliberal influence on economics and jurisprudence has significantly diminished;[8] however, many German economists define themselves as Ordoliberals through the present day, the ORDO is still published, and the Faculty of Economics at the University of Freiburg is still teaching ordoliberalism. Additionally, some institutes and foundations such as the Script error: No such module "Lang". and the Script error: No such module "Lang". are engaged in the ordoliberal tradition.

Germany's Free Democratic Party (FDP) is a traditional and committed supporter of ordoliberalism,[9] the party having been influenced by the economic theories of Wilhelm Röpke and Alexander Rüstow.[10] Historical FDP party grandee Otto Graf Lambsdorff, who served as Federal Minister of Economics, was a particular proponent of ordoliberalism.[11]

Implementation

File:Bundesarchiv B 145 Bild-F004214-0033, Konrad Adenauer und Ludwig Erhard.jpg
Script error: No such module "Lang". (right) with Script error: No such module "Lang". in 1956, while Erhard was Minister of Economics

Ordoliberalism was a major influence on the economic model developed in post-war West Germany. Ordoliberalism in Germany became known as the social market economy.

The Ordoliberal model implemented in Germany was started under the government administration of Script error: No such module "Lang".. His government's Minister of Economics, Script error: No such module "Lang"., was a known Ordoliberal and adherent of the Freiburg School. Under Script error: No such module "Lang"., some, but not all, price controls were lifted, and taxes on small businesses and corporations were lowered. Furthermore, social security and pensions were increased to provide a social base income. Ordoliberals have stated that these policies led to the Script error: No such module "Lang"., or economic miracle.[12]

Theory

Ordoliberal theory holds that the state must create a proper legal environment for the economy and maintain a healthy level of competition through measures that adhere to market principles. This is the foundation of its legitimacy.[13] 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.[14]

According to 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."[15] The state should form an economic order instead of directing economic processes, and three negative examples ordoliberals used to back their theories were Nazism, Keynesianism, and Soviet socialism.[16] It is also seen as a third way between collectivism and laissez-faire liberalism.[17]

Template:Conservatism in Germany

While the ordoliberal idea of a social market is similar to that of the third-way social democracy advocated since the 1990s by the likes of the New Labour government (especially during the premiership of Tony Blair), there are a few key differences. Whilst they both adhere to the idea of providing a moderate stance between socialism and capitalism, the ordoliberal social market model often combines private enterprise with government regulation to establish fair competition (although German network industries are known to have been deregulated),[18] whereas advocates of the third-way social democracy model have been known to oversee multiple economic deregulations. The third way social democracy model has also foreseen a clash of ideas regarding the establishment of the welfare state, in comparison to the ordoliberal's idea of a social market model being open to the benefits of social welfare.[19]

Ordoliberals are also known for pursuing a minimum configuration of vital resources and progressive taxation.[20] The ordoliberal emphasis on the privatization of public services and other public firms such as telecommunication services;[18] wealth redistribution and minimum wage laws as regulative principles makes clear the links between this economic model and the social market economy.[21]

Wilhelm Röpke considered ordoliberalism to be "liberal conservatism", against capitalism in his work Script error: No such module "Lang". ("A Humane Order of Society", 1944). Script error: No such module "Lang". also criticized laissez-faire capitalism in his work Script error: No such module "Lang". ("The Failure of Economic Liberalism", 1950). The ordoliberals thus separated themselves from classical liberals[13][22] and valued the idea of social justice.[23] "Social security and social justice", wrote Script error: No such module "Lang"., "are the greatest concerns of our time".[24]

Script error: No such module "Lang". also notes the similarity (beyond just historical contemporaneity) between the Ordo/Freiburg school and the Frankfurt School of critical theory, due to their inheritance from Script error: No such module "Lang".. That is, both recognise the "irrational rationality" of the capitalist system, but not the "logic of contradiction" that Marx posited. Both groups took up the same problem, but in vastly different directions.[25] The political philosophy of Ordoliberals was influenced by Aristotle, Script error: No such module "Lang"., Script error: No such module "Lang"., Script error: No such module "Lang"., Script error: No such module "Lang"., Script error: No such module "Lang"., and Script error: No such module "Lang"..[26]

Criticism

According to Script error: No such module "Lang". and Script error: No such module "Lang"., ordoliberalism is central to the German approach to the European sovereign-debt crisis, which has often led to conflicts with other European countries.[27]

See also

References

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  1. ^ Page Module:Citation/CS1/styles.css has no content.Ptak, Ralf (2009). "Neoliberalism in Germany: Revisiting the Ordoliberal Foundations of the Social Market Economy". In Mirowski, Philip; Plehwe, Dieter (eds.). The Road From Mont Pèlerin: The Making of The Neoliberal Thought Collective. Cambridge, MA: Harvard University Press. pp. 124–125. ISBN 978-0-674-03318-4.
  2. ^ Page Module:Citation/CS1/styles.css has no content.Ptak, Ralf (2004). Vom Ordoliberalismus zur Sozialen Marktwirtschaft: Stationen des Neoliberalismus in Deutschland (in Deutsch). VS Verlag. p. 23. ISBN 978-3-8100-4111-1.
  3. ^ Page Module:Citation/CS1/styles.css has no content.Goldschmidt, Nils (2005). Wirtschaft, Politik und Freiheit: Freiburger Wirtschaftswissenschaftler und der Widerstand [Economy, politics and freedom: Freiburg economists and the resistance] (in Deutsch). Mohr Siebeck. p. 315. ISBN 978-3-16-148520-6. Retrieved 21 July 2013 – via Google Books.
  4. ^ Page Module:Citation/CS1/styles.css has no content.Gerken, Lüder (2000). Walter Eucken und sein Werk: Rückblick auf den Vordenker der sozialen Marktwirtschaft [Walter Eucken and his work: looking back at the mastermind of the social market economy] (in Deutsch). Mohr Siebeck. p. 37. ISBN 978-3-16-147503-0. Retrieved 21 July 2013 – via Google Books.
  5. ^ Page Module:Citation/CS1/styles.css has no content.Boas, Taylor C.; Gans-Morse, Jordan (2009). "Neoliberalism: From New Liberal Philosophy to Anti-Liberal Slogan". Studies in Comparative International Development. 44 (2): 137–61. doi:10.1007/s12116-009-9040-5. ISSN 0039-3606.
  6. ^ Page Module:Citation/CS1/styles.css has no content.Fèvre, Raphaël (2021). A Political Economy of Power: Ordoliberalism in Context, 1932–1950. Oxford University Press. ISBN 978-0-19-760780-0.
  7. ^ Page Module:Citation/CS1/styles.css has no content.Abelshauser, Werner (2005). The Dynamics of German Industry: Germany's Path toward the New Economy and the American Challenge. Berghahn Books. pp. 146–148. ISBN 9781782387992. Retrieved 9 October 2018.
  8. ^ Gabler Verlag (ed.), Gabler Wirtschaftslexikon, Stichwort: Freiburger Schule (online Script error: No such module "webarchive".)
  9. ^ Page Module:Citation/CS1/styles.css has no content.Charlotte Galpin (2017). The Euro Crisis and European Identities: Political and Media Discourse in Germany, Ireland and Poland. Springer. p. 83. ISBN 978-33-1951611-0.
  10. ^ Page Module:Citation/CS1/styles.css has no content.William Callison (2022). "The Historical Context of Ordoliberalism's Theoretical Development". In Thomas Biebricher; Werner Bonefeld; Peter Nedergaard (eds.). The Oxford Handbook of Ordoliberalism. Oxford University Press. p. 50. ISBN 978-01-9260543-6.
  11. ^ Page Module:Citation/CS1/styles.css has no content.Aurélie Dianara Andry (2022). Social Europe, the Road Not Taken: The Left and European Integration in the Long 1970s. Oxford University Press. p. 223. ISBN 9780192867094.
  12. ^ Page Module:Citation/CS1/styles.css has no content."Ordoliberals". Commanding Heights: The Battle for the World Economy. PBS. 2002. Archived from the original on 2018-07-28. Retrieved 2017-09-07.
  13. ^ a b Page Module:Citation/CS1/styles.css has no content.Megay, Edward N. (1970). "Anti-Pluralist Liberalism: The German Neoliberals". Political Science Quarterly. 85 (3): 422–442 [424]. doi:10.2307/2147878. JSTOR 2147878.
  14. ^ Page Module:Citation/CS1/styles.css has no content.Massimiliano, Vatiero (2010). "The Ordoliberal notion of market power: an institutionalist reassessment". European Competition Journal. 6 (3): 689–707. doi:10.5235/ecj.v6n3.689. S2CID 154973650.
  15. ^ Page Module:Citation/CS1/styles.css has no content.Padgett, Stephen (2003). "Political Economy: The German Model under Stress". In Padgett, Stephen; Paterson, William E.; Smith, Gordon (eds.). Developments in German Politics 3. Duke University Press. pp. 126–127. ISBN 978-0822332664 – via Google Books.
  16. ^ Page Module:Citation/CS1/styles.css has no content.Foucault, Michel (2010). Senellart, Michael (ed.). The Birth of Biopolitics: Lectures at the College de France (1978–9). Translated by Burchell, Graham (1st Picador Paperback ed.). New York: Palgrave MacMillan. pp. 107–110.
  17. ^ Page Module:Citation/CS1/styles.css has no content.Bonefeld, Werner (2012). "Freedom and the Strong State: On German Ordoliberalism". New Political Economy. 17 (5): 633–656. doi:10.1080/13563467.2012.656082. ISSN 1469-9923. S2CID 154374055. Archived from the original on 2022-12-15. Retrieved 2022-12-15.
  18. ^ a b Page Module:Citation/CS1/styles.css has no content.Siebert, Horst (28 May 2003), "Germany's Social Market Economy: How Sustainable is the Welfare State?" (PDF), Paper presented at the American Institute for Contemporary German Studies, Johns Hopkins University, archived from the original (PDF) on 9 March 2013, retrieved 9 November 2012
  19. ^ Page Module:Citation/CS1/styles.css has no content."Soziale Marktwirtschaft" [Social market economy]. Gabler Wirtschaftslexikon (in Deutsch). Archived from the original on 2018-03-16. Retrieved 2013-08-01.
  20. ^ Page Module:Citation/CS1/styles.css has no content."Archived copy" (PDF). Archived from the original (PDF) on 2013-12-03. Retrieved 2012-11-09.{{cite web}}: CS1 maint: archived copy as title (link)
  21. ^ Page Module:Citation/CS1/styles.css has no content.Kingston, Suzanne (2011). Greening EU Competition Law and Policy. Cambridge University Press. ISBN 9781139502788. Retrieved 1 August 2013 – via Google Books.
  22. ^ Page Module:Citation/CS1/styles.css has no content.Friedrich, Carl J. (1955). "The Political Thought of Neo-Liberalism". American Political Science Review. 49 (2): 509–525. doi:10.2307/1951819. JSTOR 1951819. S2CID 145643424.
  23. ^ Page Module:Citation/CS1/styles.css has no content.Oswalt, Walter (2008). "Zur Einführung: Walter Eucken (1891–1950)" [Introduction: Walter Eucken (1891–1950)]. In Goldschmidt, Nils; Wohlgemuth, Michael (eds.). Grundtexte zur Freiburger Tradition der Ordnungsökonomik [Basic texts on the Freiburg tradition of order economics] (in Deutsch). Mohr Siebeck. p. 128. ISBN 978-3-16-148297-7.
  24. ^ Page Module:Citation/CS1/styles.css has no content.OSO (1999). Ordoliberalism: A New Intellectual Framework for Competition Law. Oxfordscholarship.com. doi:10.1093/acprof:oso/9780199244010.001.0001. ISBN 9780199244010.
  25. ^ Page Module:Citation/CS1/styles.css has no content.Foucault, Michel (2010). Senellart, Michael (ed.). The Birth of Biopolitics: Lectures at the College de France (1978–9). Translated by Burchell, Graham (1st Picador Paperback ed.). New York: Palgrave MacMillan. p. 105.
  26. ^ Page Module:Citation/CS1/styles.css has no content.Foucault, Michel (2010). Senellart, Michael (ed.). The Birth of Biopolitics: Lectures at the College de France (1978–9). Translated by Burchell, Graham (1st Picador Paperback ed.). New York: Palgrave MacMillan. pp. 103–105.
  27. ^ Page Module:Citation/CS1/styles.css has no content.Dullien, Sebastian; Guérot, Ulrike (2012). The Long Shadow of Ordoliberalism: Germany's Approach to the Euro Crisis (PDF). London: European Council on Foreign Relations. ISBN 978-1-906538-49-1. Archived (PDF) from the original on 2016-10-24. Retrieved 2012-04-10.

Further reading

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Look up ordoliberalism or ordoliberal in Wiktionary, the free dictionary.
  • Script error: No such module "Lang"., German Ordoliberal association.
  • Script error: No such module "Lang"., German research institute in the tradition of ordoliberalism.
  • Script error: No such module "Lang"., Italian Centre Studies on Social Market Economy and liberal tradition in the light of Catholic social thought.
  • ORDO official website
  • Back issues of ORDO Yearbook Vol. 1, Vol. 65 (1948–2014)

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