Ordoliberalism as an ideology: a conceptual analysis

ABSTRACT

The Euro crisis prompted an extensive academic debate on the role of ordoliberalism, a German variant of neoliberalism, in the European crisis politics. This study contributes to the debate by reconstructing the ordoliberal ideology using Michael Freeden’s morphological approach. The ordoliberal ideology consists of a common core of political concepts (order, competition, freedom, power, state and Ordnungspolitik), differently interpreted by its various currents. The article, based on selected works of representative ordoliberal authors, compares different currents and generations of ordoliberals. For the first generation, Walter Eucken’s and Franz Böhm’s Freiburg School, Wilhelm Röpke’s sociological neoliberalism and Alfred Müller-Armack’s Social Market Economy; for the second generation, Erich Hoppmann; for the third generation, Viktor Vanberg.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. On the relation between ordoliberalism and neoliberalism, see M. Foucault, The Birth of Biopolitics. Lectures at the Collège de France 1978–79 (New York: Palgrave, 2008); S. Audier, Néo-libéralisme(s). Une Archéologie intellectuelle (Paris: Grasset, 2012); P. Mirowski and D. Plehwe (Eds), The Road from Mont Pèlerin. The Making of the Neoliberal Thought Collective (Cambridge: Harvard University Press, 2009).

2. See R. Ptak, Vom Ordoliberalismus zur Sozialen Marktwirtschaft (Wiesbaden: Springer Fachmedien, 2004); J. Hien, ‘The ordoliberalism that never was’, Contemporary Political Theory, 12(4) (2013), pp. 349–358.

3. See, for instance, W. Münchau, ‘The wacky economics of Germany’s parallel universe’, Financial Times, 16 November 2014, available at https://www.ft.com/content/e257ed96-6b2c-11e4-be68-00144feabdc0.

4. See T. Biebricher, The Political Theory of Neoliberalism (Stanford: Stanford University Press, 2018); M. Blyth, Austerity: The History of a Dangerous Idea (New York: Oxford University Press, 2013); M. Matthijs and K. McNamara, ‘’The Euro Crisis’ Theory Effect: Northern Saints, Southern Sinners, and the Demise of the Eurobond’, Journal of European Integration, 37(2) (2015), pp. 229–245; P. Nedergaard and H. Snaith, ‘“As I Drifted on a River I Could Not Control”: The Unintended Ordoliberal Consequences of the Eurozone Crisis’, Journal of Common Market Studies, 53(5) (2015), pp. 1094–1109.

5. See L. P. Feld, E. A. Köhler and D. Nientiedt, ‘The “Dark Ages” of German Macro-Economics and Other Alleged Shortfalls in German Economic Thought’ in T. Beck and H.-H. Kotz (Eds), Ordoliberalism: A German Oddity? (London: CEPR Press, 2017), pp. 41–52, available at https://ces.fas.harvard.edu/uploads/files/Reports-Articles/Ordoliberalism-A-German-Oddity-By-Hans-Helmut-Kotz.pdf.

6. M. C. Burda, ‘Ordnungsökonomik or Teutonomik?’ in Beck and Kotz (Eds), op. cit., Ref. 5, pp. 53–62; L. P. Feld, E. A. Köhler and D. Nientiedt, ‘Ordoliberalism, Pragmatism and the Eurozone Crisis: How the German Tradition Shaped Economic Policy in Europe’, European Review of International Studies, 2 (2015), pp. 48–61; J. Hien and C. Joerges, ‘Dead Man Walking? Current European Interest in the Ordoliberal Tradition’, European Law Journal, 24(2–3) (2018), pp. 142–162; B. Young, ‘Is Germany’s and Europe’s Crisis Politics Ordoliberal and/or Neoliberal?’, in T. Biebricher and F. Vogelmann (Eds), The Birth of Austerity: German Ordoliberalism and Contemporary Neoliberalism (London: Rowman & Littlefield International, 2017), pp. 221–237.

7. See P. Bofinger, ‘German macroeconomics: The long shadow of Walter Eucken’, VoxEU.org, 7 June 2016, available at https://voxeu.org/article/german-macroeconomics-long-shadow-walter-eucken.

8. For instance, the president of the Bundesbank, Jens Weidmann, suggested in his 2013 speech ‘Krisenmanagement und Ordnungspolitik’ that the European leaders should go to bed with a copy of Walter Eucken’s Grundsätze der Wirtschaftspolitik, ‘under the pillow’. The speech is available at https://www.bundesbank.de/de/presse/reden/krisenmanagement-und-ordnungspolitik-710712.

9. B. Young, ‘Ordoliberalism as an “Irritating German Idea”’, in Beck and Kotz (Eds), op. cit., Ref. 5, pp. 31–40.

10. W. Jacoby, ‘The politics of the Eurozone Crisis: Two puzzles behind the German Consensus’, German Politics and Society, 32(2) (2014), pp. 70–85.

11. R. Sally, ‘Ordoliberalism and the Social Market: Classic Political Economy from Germany’, New Political Economy, 1(2) (1996), pp. 233–257. The Freiburg School was founded by Walter Eucken, Franz Böhm and Hans Grossmann-Doerth. The ‘sociological neoliberalism’ group was formed by Wilhelm Röpke and Alexander Rüstow. The ‘Social Market Economy’ (Soziale Marktwirtschaft) was theorized by Alfred Müller-Armack.

12. K. Dyson, ‘Ordoliberalism as Tradition and Ideology’ in J. Hien and C. Joerges (Eds), Ordoliberalism, Law and the Rule of Economics (Oxford: Hart, 2017), pp. 96–97. The most prominent exponents of the second generation were Erich Hoppmann and Ernst-Joachim Mestmäcker. The third generation is represented by Viktor Vanberg and by the scholars, close to the Walter Eucken Institut, who build on his work.

13. For instance, W. Bonefeld, The Strong State and the Free Economy (London: Rowman & Littlefield International, 2017); G. Dale, ‘Justificatory Fables of Ordoliberalism: Laissez-faire and the “Third Way”’, Critical Sociology 45(7–8) (2019), pp.1047–1060; Q. Slobodian, Globalists. The End of Empire and the Birth of Neoliberalism (Cambridge, Massachusetts: Harvard University Press, 2018).

14. See M. Freeden, Ideologies and Political Theory: A Conceptual Approach (Oxford: Oxford University Press, 1996).

15. Young, ‘Ordoliberalism’, op. cit., Ref. 9, p. 37.

16. See W. Eucken, Die Grundlagen der Nationalökonomie (Berlin: Springer-Verlag, 1950), p. 239. All translations into English are mine.

17. Ordo is also the title of the journal, still active, founded by Eucken and Böhm which serves as a forum for ordoliberal scholars. The term ‘ordoliberalism’ was coined by Hero Moeller after the title of the journal. See Ptak, Ordoliberalismus, op. cit., Ref. 2, p. 23, note 1.

18. J. Hien, ‘The Religious Foundations of the European Crisis, Journal of Common Market Studies, 57(2) (2019), pp. 185–204.

19. P. Manow, ‘Ordoliberalismus als ökonomische Ordnungstheologie’, Leviathan, 29(2) (2001), p. 190.

20. W. Eucken, Grundsätze der Wirtschaftspolitik (Tübingen: Mohr, 1960), pp. 7–14.

21. W. Eucken, ‘Das ordnungspolitische Problem’, ORDO: Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, 1 (1948), p. 68–69.

22. W. Eucken, ‘Die Wettbewerbsordnung und ihre Verwirklichung’, ORDO: Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, 2 (1949), p. 6.

23. Eucken, ‘Das ordnungspolitische Problem’, op. cit., Ref. 21, p. 77. This does not imply that the Freiburg School was unconcerned with moral and social issues, but rather that the non-economic orders were seen as exogenous to their analysis; see S. Kolev, Macht und soziale Kohäsion als Determinanten: Zur Rolle des Staates in der Wirtschaftspolitik bei Walter Eucken und Wilhelm Röpke, HWWI Research Papers 5–8 (2009), p. 27, available at https://www.econstor.eu/bitstream/10419/48179/1/664098606.pdf.

24. F. Böhm, ‘Die Idee des Ordo Im Denken Walter Euckens’, ORDO: Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, 3 (1950), p. xxxii.

25. F. Böhm, Wirtschaftsordnung und Staatsverfassung (Tübingen: Mohr, 1949), p. 48.

26. F. Böhm, W. Eucken and H. Grossmann-Doerth, ‘The Ordo Manifesto’ in H. Willgerodt and A. Peacock (Eds), Germany’s Social Market Economy: Origins and Evolution (New York: Palgrave Macmillan, 1989), p. 24.

27. See F. Böhm, ‘Privatrechtsgesellschaft und Marktwirtschaft’, ORDO: Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, 17 (1966), pp. 75–151.

28. Eucken, ‘Wettbewerbsordnung’, op. cit., Ref. 22, p. 54.

29. Eucken, Grundlagen, op. cit., Ref. 16, p. 111.

30. F. Böhm, ‘Freiheit und Ordnung in der Marktwirtschaft’, ORDO: Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, 22 (1971), p. 20.

31. Eucken, ‘Wettbewerbsordnung’, op. cit., Ref. 22, p. 5.

32. Eucken, Grundsätze, op. cit., Ref. 20, pp. 42–43.

33. Böhm, ‘Privatrechtsgesellschaft’, op. cit., Ref. 27, pp. 140–141.

34. F. Böhm, ‘Wettbewerbsfreiheit und Kartellfreiheit’, ORDO: Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, 10 (1958), p. 197.

35. Eucken, Grundsätze, op. cit., Ref. 20, pp. 175–179.

36. Böhm, Wirtschaftsordnung, op. cit., Ref. 25, pp. 47–49.

37. Eucken, ‘Wettbewerbsordnung’, op. cit., Ref. 22, p. 6.

38. W. Eucken, ‘Staatliche Strukturwandlungen und die Krise des Kapitalismus’, Weltwirtschaftliches Archiv, 36 (1932), p. 298.

39. Böhm, Wirtschaftsordnung, op. cit., Ref. 25, pp. 32.

40. Eucken, Grundsätze, op. cit., Ref. 20, pp. 327, 336.

41. Eucken, ‘Wettbewerbsordnung’, op. cit., Ref. 22, p. 93.

42. Eucken, Grundsätze, op. cit., Ref. 20, pp. 254–291.

43. Eucken, ibid., p. 279.

44. Eucken, ibid., pp. 291–304.

45. Kolev, op. cit., Ref. 23, p. 27.

46. W. Röpke, A Humane Economy. The Social Framework of Free Market (Chicago: Henry Regnery Company, 1960), p. 91–98. On responsibility, see also W. Röpke, The Social Crisis of Our Time (Chicago: University of Chicago Press, 1950), p. 164.

47. W. Röpke, Civitas Humana: A Humane Order of Society (London: William Hodge and Company, 1948), pp. 132–134.

48. Röpke, Social Crisis, op. cit., Ref. 46, p. 14.

49. Röpke, ibid., p. 104.

50. Röpke, ibid., p. 52.

51. Röpke, Civitas Humana, op. cit., Ref. 47, pp. 26–34.

52. Röpke, ibid., pp. 29–30.

53. Röpke, ibid., p. 30.

54. Röpke, ibid., pp. 30–32, 156–158.

55. Röpke, Social Crisis, op. cit., Ref. 46, p. 192.

56. Röpke, Civitas Humana, op. cit., Ref. 47, pp. 85–91.

57. R. Sally, ‘The International Political Economy of Wilhelm Röpke: Liberalism “From Below”’, Millennium: Journal of International Studies, 26(2) (1997), pp. 275–294.

58. W. Röpke, International Order and Economic Integration (Dordrecht: D. Reidel publishing Company, 1959), p. 10–16.

59. Röpke, ibid., pp. 72–77, 156–158.

60. Röpke, ibid., pp. 260–262.

61. Röpke, ‘Nation und Weltwirtschaft’, ORDO: Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, 17 (1966), p. 46.

62. Röpke, Social Crisis, op. cit., Ref. 46, p. 242.

63. Röpke, International Order, op. cit., Ref. 58, p. 108.

64. Röpke, Civitas Humana, op. cit., Ref. 47, p. 13; Röpke, Social Crisis, op. cit., Ref. 46, p. 49.

65. Röpke, Humane Economy, op. cit., Ref. 46, p. 33.

66. A. Müller-Armack, ‘Wirtschaftslenkung und Marktwirtschaft’, in A. Müller-Armack (Ed.), Wirtschaftsordnung und Wirtschaftspolitik: Studien und Konzepte zur Sozialen Marktwirtschaft und zur Europäischen Integration (Freiburg im Breisgau: Verlag Rombach, 1966), pp. 81–109.

67. A. Müller-Armack, ‘Abhängigkeit und Selbständigkeit in den Wirtschaftsordnungen’, in Müller-Armack (Ed.), Wirtschaftsordnung, op. cit., Ref. 66, pp. 220–221.

68. Müller-Armack, ‘Soziale Marktwirtschaft’, in Müller-Armack (Ed.), Wirtschaftsordnung, op. cit., Ref. 66, p. 244.

69. A. Müller-Armack, ‘Die gesellschaftspolitische Leitbild der Sozialen Marktwirtschaft’, in Müller-Armack (Ed.), Wirtschaftsordnung, op. cit., Ref. 66, pp. 302–303; A. Müller-Armack, ‘Stil und Ordnung der Sozialen Marktwirtschaft’, in N. Goldschmidt and M. Wohlgemuth (Eds), Grundtexte zur Freiburger Tradition der Ordnungsökonomik (Tübingen: Mohr Siebeck, 2008), pp. 460–463.

70. Müller-Armack, ‘Stil und Ordnung’, op. cit., Ref. 69, pp. 459–463; Müller-Armack, ‘Wirtschaftslenkung’, op. cit., Ref. 66, pp. 106–107.

71. A. Müller-Armack, ‘Der Moralist und der Ökonom: Zur Frage der Humanisierung der Wirtschaft’, ORDO: Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, 21 (1970), p. 29.

72. Müller-Armack, ‘Wirtschaftslenkung’, op. cit., Ref. 66, p. 119.

73. Müller-Armack, ‘Stil und Ordnung’, op. cit., Ref. 69, p. 464; Müller-Armack, ‘Gesellschaftspolitische Leitbild’, op. cit., Ref. 69, pp. 304–305.

74. Müller-Armack, ‘Soziale Marktwirtschaft’, op. cit., Ref. 68, p. 246.

75. Müller-Armack, ‘Der zweite Phase der Sozialen Marktwirtschaft’, in Müller-Armack (Ed.), Wirtschaftsordnung, op. cit., Ref. 66, pp. 278–279.

76. Müller-Armack, ‘Gesellschaftspolitische Leitbild’, op. cit., Ref. 69, p. 305.

77. V. Vanberg, ‘Soziale Sicherheit, Müller-Armacks “Soziale Irenik” und die ordoliberale Perspektive’, in V. Vanberg (Ed.), Wettbewerb und Regelordnung (Tübingen: Mohr Siebeck, 2009), pp. 173–194.

78. On the affinities between Hayek and the ordoliberals, see V. Vanberg, ‘Hayek in Freiburg’, in R. Leeson (Ed.), Hayek: A Collaborative Biography (London: Palgrave Macmillan, 2013), pp. 93–122.

79. E. Hoppmann, ‘Moral und Moralsystem’, ORDO: Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, 41 (1990), pp. 13–23.

80. Hoppmann, ibid.

81. E. Hoppmann, Prinzipien freiheitlicher Wirtschaftspolitik (Tübingen: Mohr, 1993), pp. 22–24.

82. Hoppmann, ‘Moral’, op. cit., Ref. 79, p. 18.

83. Hoppmann, Prinzipien, op. cit., Ref. 81, pp. 8–12.

84. On cultural evolution, see F. A. Hayek, Law, Legislation and Liberty (London: Routledge, 1982), vol. 3, p. 155.

85. E. Hoppmann, ‘Walter Euckens Ordnungsökonomik – Heute’, ORDO: Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, 46 (1995), p. 51.

86. Hoppmann, Prinzipien, op. cit., Ref. 81, pp. 24–33.

87. See F. A. Hayek, ‘The use of knowledge in society’, in F. A. Hayek (Ed.), Individualism and Economic Order (Chicago: University of Chicago Press, 1948), pp. 33–56.

88. Hoppmann, Prinzipien, op. cit., Ref. 81, pp. 10–12; F. A. Hayek, ‘Competition as a discovery procedure’, The Quarterly journal of Austrian Economics, 5(3) (2002), pp. 9–23.

89. F. A. Hayek, ‘The confusion of Language in Political Thought’, in F. A. Hayek (Ed.), New Studies in Philosophy, Politics, Economics and the History of Ideas (London: Routledge, 1985), p. 71.

90. Hoppmann, ‘Euckens Ordnungsökonomik’, op. cit., Ref. 85, pp. 51–52. ‘The pretence of knowledge’ was the title of Hayek’s Nobel Memorial Lecture in 1974.

91. E. Hoppmann, Fusionskontrolle (Tübingen: Mohr, 1973), p. 18.

92. Hoppmann, ‘Moral’, op. cit., Ref. 79, pp. 5–6.

93. Hoppmann, Prinzipien, op. cit., Ref. 81, p. 12.

94. Hoppmann, ‘Moral’, op. cit., Ref. 79, p. 4.

95. Hoppmann, ‘Euckens Ordnungsökonomik’, op. cit., Ref. 85, pp. 44–45. On currency competition, see F. A. Hayek, Denationalization of Money – The Argument Refined. An Analysis of the Theory and Practice of Concurrent Currencies (London: Institute of Economic Affairs, 1990).

96. Hoppmann, ‘Euckens Ordnungsökonomik’, op. cit., Ref. 85, pp. 47–48.

97. Böhm, Wirtschaftsordnung, op. cit., Ref. 25, pp. 34–39.

98. Hoppmann, Fusionskontrolle, op. cit., Ref. 91, pp. 80–90.

99. V. Vanberg, ‘Constitutionally Constrained and Safeguarded Competition in Markets and Politics with Reference to a European Constitution’, Journal des Économistes et des Études Humaines, 4 (1993), pp. 3–4.

100. V. Vanberg, ‘Die Verfassung der Freiheit: Zum Verhältnis von Liberalismus und Demokratie’, in Vanberg (Ed.), Wettbewerb, op. cit., Ref. 77, pp. 107–110; V. Vanberg, ‘Das Paradoxon der Marktwirtschaft: Die Verfassung des Marktes und das Problem der “sozialen Sicherheit”’, in Vanberg (Ed.), Wettbewerb, op. cit., Ref. 77, p. 167.

101. See L. Feld and E. A. Köhler, ‘Ist die Ordnungsökonomik Zukunftsfähig?’, Zeitschrift für Wirtschafts- und Unternehmensethik, 12(2) (2011), pp. 173–195.

102. V. Vanberg, ‘Der konsensorientierte Ansatz der konstitutionellen Ökonomik’, in Vanberg (Ed.), Wettbewerb, op. cit., Ref. 77, pp. 37–40.

103. V. Vanberg, ‘Globalization, Democracy, and Citizens’ Sovereignty: Can Competition Among Governments Enhance Democracy?’, Constitutional Political Economy, 11 (2000), p. 95.

104. Vanberg, ibid., pp. 89–90.

105. V. Vanberg, Competition among governments: The state’s two roles in a globalized world, Freiburger Diskussionspapiere zur Ordnungsökonomik, 10(2) (2010), p. 4, available at https://www.econstor.eu/bitstream/10419/51551/1/670800511.pdf.

106. Vanberg, ‘Constrained and Safeguarded Competition’, op. cit., Ref. 99, pp. 3–4.

107. Vanberg, Competition among governments, op. cit., Ref. 105, pp. 1–6.

108. Vanberg, ‘Constrained and Safeguarded Competition’, op. cit., Ref. 99, p. 13.

109. Vanberg, Competition among governments, op. cit., Ref. 105, pp. 8–20.

110. Vanberg, ‘Globalization’, op. cit., Ref. 103, p. 96.

111. Vanberg, ‘Constrained and Safeguarded Competition’, op. cit., Ref. 99, p. 20.

112. V. Vanberg, ‘Bürgersouveranität und wettbewerblicher Föderalismus: Das Beispiel der EU’, in V. Vanberg (Ed.), Wettbewerb, op. cit., Ref. 77, p. 123.

113. Vanberg, ‘Constrained and Safeguarded Competition’, op. cit., Ref. 99, p. 19.

114. V. Vanberg, ‘Subsidiarity, Responsive Government and Individual Liberty’, in B. Steunenberg and F. Van Vught (Eds), Political Institutions and Public Policy. Perspectives on European Decision Making (Doldrecht: Springer Science+Business Media, 1997), pp. 189–204.

115. Vanberg, ‘Constrained and Safeguarded Competition’, op. cit., Ref. 99, pp. 21–22.

116. Vanberg, ibid., pp. 17–18.

117. Freedom and power are core concepts of the liberal morphology, whereas competition and state can be interpreted as adjacent concepts. See Freeden, Ideologies, op. cit., Ref. 14, pp. 141–225, 276–316.

118. Freeden, Ideologies, op. cit., Ref. 14, pp. 332–333.

119. Freeden, ibid.

120. Because of its kinship to Carl Schmitt’s political theology, the concept of the strong state was highly controversial. See R. Ptak, ‘Neoliberalism in Germany: Revisiting the ordoliberal Foundations of the Social Market Economy’, in Mirowski and Plehwe (Eds), op. cit., Ref. 1, p. 111; V. Vanberg, ‘Ordoliberalism, Ordnungspolitik, and the Reason of Rules’, European Review of International Studies, 2(3) (2015), pp. 30–31.

121. See, for instance, P. Praet, ‘Sound money, sound finances, a competitive economy – principles of a European culture of stability’, 27 February 2012, available at https://www.ecb.europa.eu/press/key/date/2012/html/sp120227.en.html.

122. M. Freeden, ‘Is Nationalism a Distinct Ideology?’, Political Studies, 46 (1998), pp. 748–765.

123. W. Schäuble, ‘Das Prinzip wertebegründeter Politik’, FAZ, 24 June 2013, available at https://www.faz.net/aktuell/wirtschaft/wirtschaftspolitik/gastbeitrag-von-wolfgang-schaeuble-das-prinzip-wertebegruendeter-politik-12242592.html.

124. S. Wagenknecht, Freiheit statt Kapitalismus (Frankfurt: Eichborn-Verlag, 2011).

125. Bundesministerium für Wirtschaft und Energie, Nationale Industriestrategie 2030, available at https://www.bmwi.de/Redaktion/DE/Publikationen/Industrie/nationale-industriestrategie-2030.pdf?__blob=publicationFile&v=24.

126. V. Vanberg, ‘Freiheit statt Kapitalismus’? Ein Kommentar zu Sahra Wagenknechts Buch aus Freiburger Sicht’, Freiburger Diskussionspapiere zur Ordnungsökonomik, 15(03) (2015), available at https://www.econstor.eu/bitstream/10419/110365/1/824837142.pdf; O. Gersemann, ‘Wirtschaftsweiser wirft Altmaier “Planwirtschaft” vor’, Die Welt, 1 February 2019, available at https://www.welt.de/wirtschaft/article188074825/Industriestrategie-2030-Wirtschaftsweiser-wirft-Altmaier-Planwirtschaft-vor.html.

127. H.-W. Sinn, Casino Capitalism (New York: Oxford University Press, 2010).

Additional information

Funding

This article was written in the context of Project REScEU (Reconciling Economic and Social Europe - www.resceu.eu), funded by the European Research Council (Advanced Grant no. 340534).