Ordoliberalism and the Rethinking of Liberal Rationality
Ordoliberalism is often referred to as the German version of neoliberalism and the dominant economic ideology behind the European economic constitution. Following the German experience of the interwar period, ordoliberal theory is best known for its empha
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Ordoliberalism and the Rethinking of Liberal Rationality Timo Miettinen
Ordoliberalism is best known as one of the central traditions of European neoliberalism and the official economic ideology of post-WWII Germany. Following the German experience of the interwar period, ordoliberal theory is known for its emphasis on the role of state and a strong legal framework for free market economy. Traditionally, ordoliberals have been in favour of strong competition laws that regulate markets by dismantling monopolies, preventing the abuse of controlling market positions, and limiting state aid (see e.g. Brunnermeier et al. 2016; Dullien and Guérot 2012; Demetriades 2015). Ordoliberal theorists have favoured a rule-based approach to macroeconomic coordination and emphasized the neutrality of monetary policy. In the research literature on the European economic model, ordoliberalism is often viewed as the key ideology behind the rule-based economic constitution of the European Union
T. Miettinen (B) University of Helsinki, Helsinki, Finland e-mail: [email protected] © The Author(s) 2021 A. M. Cunha and C. E. Suprinyak (eds.), Political Economy and International Order in Interwar Europe, Palgrave Studies in the History of Economic Thought, https://doi.org/10.1007/978-3-030-47102-6_10
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(Tuori and Tuori 2014, 231ff. See also e.g. Streit and Mussler 1994; Hien and Joerges 2017).1 Although economic policies can hardly be explained on the basis of a single intellectual tradition, many claim that ordoliberalism is more relevant than ever. Mechanisms such as the 2012 Fiscal compact have strengthened the implementation of rule-based economic coordination and the future of French-style fiscal union looks bleak (Young 2014). On a more general level, ordoliberal ideas of individual responsibility and moral hazard have surfaced particularly in the German or “Northern” narrative according to which the irresponsible behaviour of problem countries constituted the key cause of the Euro crisis (Fourcade 2013). In this regard, concepts such as authoritarian liberalism or executive federalism are more and more discussed in connection to the contemporary European economic policy (see e.g. Bonefeld 2017; Habermas 2012; Haselbach 1991). Although the COVID–19 virus has challenged some of the political principles of ordoliberal governance—such as budget rules and limitations on state aid—it has not changed the fundamental division between Northern and Southern Europe and their approaches to economic governance. On the contrary, stark divisions persist between North and South on the viability and scope of EU level fiscal responses. Thus, ordoliberal ideas and policies are thus absolutely crucial for any discussion on national sovereignty, democratic accountability, and the future of liberalism in today’s Europe. Despite this relevance, the concept itself lacks analytic clarity. Ordoliberalism is frequently conflated with Germany’s political and economic interests, or, it is simply seen as a more socially oriente
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