Product Code Database
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.
Ordoliberal ideals became the foundation of the creation of the post-World War II German social market economy and its attendant Wirtschaftswunder. The term "ordoliberalism" () was coined in 1950 by and refers to the academic journal ORDO.
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 Colloque Walter Lippmann by italic=no, who is regarded as an ordoliberal today.
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 italic=no 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.
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.
Since the 1960s, ordoliberal influence on economics and jurisprudence has significantly diminished;Springer Gabler (ed.), Gabler Wirtschaftslexikon, Stichwort: Freiburger Schule ( online ) 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 italic=no and the italic=no are engaged in the ordoliberal tradition.
Germany's Free Democratic Party (FDP) is a traditional and committed supporter of ordoliberalism, the party having been influenced by the economic theories of Wilhelm Röpke and Alexander Rüstow. Historical FDP party grandee Otto Graf Lambsdorff, who served as Federal Minister of Economics, was a particular proponent of ordoliberalism.
The Ordoliberal model implemented in Germany was started under the government administration of italic=no. His government's Minister of Economics, italic=no, was a known Ordoliberal and adherent of the Freiburg School. Under italic=no, 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 Wirtschaftswunder, or economic miracle.
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 macroeconomics policy is the preserve of employers and trade unions." 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. It is also seen as a third way between collectivism and laissez-faire liberalism.
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 ), whereas advocates of the third-way social democracy model have been known to oversee multiple economic . 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 economics of social welfare.
Ordoliberals are also known for pursuing a minimum configuration of vital resources and . The ordoliberal emphasis on the privatization of public services and other public firms such as telecommunication services; wealth redistribution and minimum wage laws as regulative principles makes clear the links between this economic model and the social market economy.
Wilhelm Röpke considered ordoliberalism to be "liberal conservatism", against capitalism in his work Civitas Humana ("A Humane Order of Society", 1944). italics=no also criticized laissez-faire capitalism in his work italic=yes ("The Failure of Economic Liberalism", 1950). The ordoliberals thus separated themselves from classical liberals and valued the idea of social justice. "Social security and social justice", wrote italic=no, "are the greatest concerns of our time".
italic=no 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 italic=no. That is, both recognise the "irrational " of the capitalist system, but not the "logic of contradiction" that Karl Marx posited. Both groups took up the same problem, but in vastly different directions. The political philosophy of Ordoliberals was influenced by Aristotle, italic=no, italic=no, italic=no, italic=no, italic=no, and italic=no.
|
|
