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{{short description|German political philosophy}}
{{Liberalism sidebar |Variants}}
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'''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.<ref>{{cite book |first=Ralf |last=Ptak |chapter=Neoliberalism in Germany: Revisiting the Ordoliberal Foundations of the Social Market Economy |editor1-first=Philip |editor1-last=Mirowski |editor2-first=Dieter |editor2-last=Plehwe |title=The Road From Mont Pèlerin: The Making of The Neoliberal Thought Collective |url=https://archive.org/details/roadfrommontpele00miro_520 |url-access=limited |location=Cambridge, MA|publisher=Harvard University Press |year=2009 |isbn=978-0-674-03318-4 |pages=[https://archive.org/details/roadfrommontpele00miro_520/page/n132 124]–125}}</ref>

Ordoliberal ideals became the foundation of the creation of the post-[[World War II]] German [[social market economy]] and its attendant {{lang|de|[[Wirtschaftswunder]]}}. The term "ordoliberalism" ({{langx|de|Ordoliberalismus}}) was coined in 1950 by {{ill|Hero Moeller|de}} and refers to the academic journal ''[[ORDO (journal)|ORDO]]''.<ref>{{cite book |first=Ralf |last=Ptak |title=Vom Ordoliberalismus zur Sozialen Marktwirtschaft: Stationen des Neoliberalismus in Deutschland |publisher=VS Verlag |year=2004 |isbn=978-3-8100-4111-1 |page=23 |language=de}}</ref>

== Linguistic differentiation ==

Ordoliberals separate themselves from [[classical liberals]]. Notably, {{lang|de|[[Walter Eucken]]|italic=no}}, with {{lang|de|[[Franz Böhm]]|italic=no}}, founder of ordoliberalism and the [[Freiburg School]],<ref name="Goldschmidt2005">{{cite book |first=Nils |last=Goldschmidt |title=Wirtschaft, Politik und Freiheit: Freiburger Wirtschaftswissenschaftler und der Widerstand |language=de |trans-title=Economy, politics and freedom: Freiburg economists and the resistance |url=https://books.google.com/books?id=SvNEWSk_HFQC |access-date=21 July 2013 |year=2005 |publisher=Mohr Siebeck |isbn=978-3-16-148520-6 |page=315 |via=[[Google Books]]}}</ref> rejected [[neoliberalism]].<ref name="Gerken2000">{{cite book |first=Lüder |last=Gerken |title=Walter Eucken und sein Werk: Rückblick auf den Vordenker der sozialen Marktwirtschaft |language=de |trans-title=Walter Eucken and his work: looking back at the mastermind of the social market economy |url=https://books.google.com/books?id=xx8lxh7PZKMC |access-date=21 July 2013 |year=2000 |publisher=Mohr Siebeck |isbn=978-3-16-147503-0 |page=37 |via=[[Google Books]]}}</ref>

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 {{lang|fr|[[Colloque Walter Lippmann]]}} by {{lang|de|[[Alexander Rüstow]]|italic=no}}, who is regarded as an ordoliberal today.<ref name="ReferenceA">{{cite journal |first1=Taylor C. |last1=Boas |first2=Jordan |last2=Gans-Morse |title=Neoliberalism: From New Liberal Philosophy to Anti-Liberal Slogan |journal=Studies in Comparative International Development |volume=44 |issue=2 |year=2009 |issn=0039-3606 |pages=137–61 |doi=10.1007/s12116-009-9040-5|doi-access=free}}</ref>

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 {{lang|fr|[[Michel Albert]]|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.

== Development ==
The theory was developed from about 1930 to 1950 by [[Germany|German]] [[economists]] and legal scholars from the [[Freiburg School]], such as [[Walter Eucken]], {{lang|de|[[Franz Böhm]]|italic=no}}, Hans Grossmann-Doerth, and Leonhard Miksch.<ref>{{Cite book |last=Fèvre |first=Raphaël |url=https://books.google.com/books?id=hfhQEAAAQBAJ |title=A Political Economy of Power: Ordoliberalism in Context, 1932–1950 |date=2021 |publisher=Oxford University Press |isbn=978-0-19-760780-0 |language=en}}</ref>

Ordoliberal ideals (with modifications) drove the creation of the post-[[World War&nbsp;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.<ref name="Abelshauser2005">{{cite book |last1=Abelshauser |first1=Werner |title=The Dynamics of German Industry: Germany's Path toward the New Economy and the American Challenge |date=2005 |publisher=Berghahn Books |isbn=9781782387992 |pages=146–148 |url=https://books.google.com/books?id=hkbkBgAAQBAJ |access-date=9 October 2018 |language=en}}</ref>

Since the 1960s, ordoliberal influence on economics and jurisprudence has significantly diminished;<ref>[[Springer Gabler|Gabler Verlag]] (ed.), Gabler Wirtschaftslexikon, Stichwort: Freiburger Schule ([http://wirtschaftslexikon.gabler.de/Archiv/7246/freiburger-schule-v8.html online] {{Webarchive|url=https://web.archive.org/web/20121025052143/http://wirtschaftslexikon.gabler.de/Archiv/7246/freiburger-schule-v8.html |date=2012-10-25 }})</ref> however, many German economists define themselves as Ordoliberals through the present day, the ''[[ORDO (journal)|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 {{lang|de|[[Walter Eucken Institut]]|italic=no}} and the {{lang|de|[[Stiftung Ordnungspolitik]]|italic=no}} are engaged in the ordoliberal tradition.

Germany's [[Free Democratic Party (Germany)|Free Democratic Party]] (FDP) is a traditional and committed supporter of ordoliberalism,<ref name="Galpin2017">{{cite book|author=Charlotte Galpin|title=The Euro Crisis and European Identities: Political and Media Discourse in Germany, Ireland and Poland|year=2017|publisher=Springer|isbn=978-33-1951611-0|url=https://books.google.com/books?id=G2gpDwAAQBAJ&pg=PA83|page=83}}</ref> the party having been influenced by the economic theories of [[Wilhelm Röpke]] and [[Alexander Rüstow]].<ref name="Callision2022">{{cite book|author=William Callison|chapter=The Historical Context of Ordoliberalism's Theoretical Development|editor1=Thomas Biebricher|editor2=Werner Bonefeld|editor3=Peter Nedergaard|title=The Oxford Handbook of Ordoliberalism|year=2022|publisher=Oxford University Press|isbn=978-01-9260543-6|chapter-url=https://books.google.com/books?id=WWiLEAAAQBAJ&pg=PA50|page=50}}</ref> Historical FDP party grandee [[Otto Graf Lambsdorff]], who served as [[Federal Ministry of Economics and Technology (Germany)|Federal Minister of Economics]], was a particular proponent of ordoliberalism.<ref name="Andry2022">{{cite book|author=Aurélie Dianara Andry|title=Social Europe, the Road Not Taken: The Left and European Integration in the Long 1970s|year=2022|publisher=Oxford University Press|isbn=9780192867094|url=https://books.google.com/books?id=0iyWEAAAQBAJ&pg=PA223|page=223}}</ref>

== Implementation ==
[[File:Bundesarchiv B 145 Bild-F004214-0033, Konrad Adenauer und Ludwig Erhard.jpg|thumbnail|{{lang|de|[[Ludwig Erhard]]|italic=no}} with {{lang|de|[[Konrad Adenauer]]|italic=no}} 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 {{lang|de|[[Konrad Adenauer]]|italic=no}}. His government's [[Federal Ministry for Economic Affairs and Energy|Minister of Economics]], {{lang|de|[[Ludwig Erhard]]|italic=no}}, was a known Ordoliberal and adherent of the [[Freiburg School]]. Under {{lang|de|Adenauer|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 {{lang|de|[[Wirtschaftswunder]]}}, or economic miracle.<ref>{{cite web |title=Ordoliberals |url=https://www.pbs.org/wgbh/commandingheights/shared/minitext/ess_ordoliberals.html |website=Commanding Heights: The Battle for the World Economy |publisher=[[PBS]] |date=2002 |access-date=2017-09-07 |archive-date=2018-07-28 |archive-url=https://web.archive.org/web/20180728191254/https://www.pbs.org/wgbh/commandingheights/shared/minitext/ess_ordoliberals.html |url-status=live }}</ref>

== Theory ==
Ordoliberal theory holds that the [[state (polity)|state]] must create a proper legal environment for the economy and maintain a healthy level of [[competition policy|competition]] through measures that adhere to [[market (economics)|market principles]]. This is the foundation of its [[rational-legal authority|legitimacy]].<ref name="Megay">{{cite journal |last=Megay |first=Edward N. |year=1970 |title=Anti-Pluralist Liberalism: The German Neoliberals |journal=[[Political Science Quarterly]] |volume=85 |issue=3 |pages=422–442  [424]|doi=10.2307/2147878 |jstor=2147878}}<!--page 424: "Briefly, neoliberalism wants the government to establish and maintain the economic order, namely an open, free, and competitive market economy—but to leave the economic process to free private decisions within that economic order"--></ref> The concern is that, if the state does not take active measures to foster competition, [[corporation|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]].<ref>{{cite journal |first=Vatiero |last=Massimiliano |year=2010 |title=The Ordoliberal notion of market power: an institutionalist reassessment |journal=European Competition Journal |volume=6 |issue=3 |pages=689–707 |doi=10.5235/ecj.v6n3.689 |s2cid=154973650}}</ref>

According to Stephen Padgett, "a central tenet of ordo-liberalism is a clearly defined division of [[labour (economics)|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|macro-economic]] policy is the preserve of [[employment#Employer|employers]] and [[trade unions]]."<ref>{{cite book |chapter-url=https://books.google.com/books?id=Bo-C2uExHw8C&q=A+central+tenet+of+ordo-liberalism+is+a+clearly+defined+division+of+labor+in+economic+management&pg=PA126 |first=Stephen |last=Padgett |chapter=Political Economy: The German Model under Stress |editor1-first=Stephen |editor1-last=Padgett |editor2-first=William E. |editor2-last=Paterson |editor3-first=Gordon |editor3-last=Smith |title=Developments in German Politics 3 |pages=[https://archive.org/details/developmentsinge00smit/page/126 126–127] |publisher=[[Duke University Press]] |year=2003 |isbn=978-0822332664 |url=https://archive.org/details/developmentsinge00smit/page/126 |via=[[Google Books]]}}</ref> 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 [[Ideology of the Communist Party of the Soviet Union|Soviet socialism]].<ref>{{cite book |last=Foucault |first=Michel |title=The Birth of Biopolitics: Lectures at the College de France (1978–9) |translator-first=Graham |translator-last=Burchell |editor-first=Michael |editor-last=Senellart |edition=1st Picador Paperback |location=New York |publisher=[[Palgrave MacMillan]] |year=2010 |pages=107–110 |title-link=The Birth of Biopolitics}}</ref> It is also seen as a [[third way (centrism)|third way]] between [[Collectivism and individualism|collectivism]] and [[classical liberalism|laissez-faire liberalism]].<ref>{{cite journal |last=Bonefeld |first=Werner |url=https://eprints.whiterose.ac.uk/67263/1/s1_ln11019519_896202810_1939656818Hwf15952 |date=2012 |title=Freedom and the Strong State: On German Ordoliberalism |journal=New Political Economy |volume=17 |issue=5 |pages=633–656 |issn=1469-9923 |doi=10.1080/13563467.2012.656082 |s2cid=154374055 |access-date=2022-12-15 |archive-date=2022-12-15 |archive-url=https://web.archive.org/web/20221215114459/https://eprints.whiterose.ac.uk/67263/1/s1_ln11019519_896202810_1939656818Hwf15952 |url-status=live }}</ref>

{{Conservatism in Germany|Ideologies}}

While the ordoliberal idea of a social market is similar to that of the [[third way (centrism)|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 (economics)|competition]] (although German network industries are known to have been [[deregulate]]d),<ref name="ifw-kiel.de">{{citation |contribution=Germany's Social Market Economy: How Sustainable is the Welfare State? |contribution-url=http://www.ifw-kiel.de/das-ifw/organisation/siebert/siebert-pdf/Washington2003.pdf |first=Horst |last=Siebert |author-link=Horst Siebert |title=Paper presented at the American Institute for Contemporary German Studies, Johns Hopkins University |date=28 May 2003 |title-link=Johns Hopkins University |access-date=9 November 2012 |archive-date=9 March 2013 |archive-url=https://web.archive.org/web/20130309010513/http://www.ifw-kiel.de/das-ifw/organisation/siebert/siebert-pdf/Washington2003.pdf |url-status=dead }}</ref> whereas advocates of the third-way social democracy model have been known to oversee multiple economic [[deregulation]]s. 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|benefits]] of [[social welfare]].<ref>{{cite web |url=http://wirtschaftslexikon.gabler.de/Definition/soziale-marktwirtschaft.html |title=Soziale Marktwirtschaft |trans-title=Social market economy |website=Gabler Wirtschaftslexikon |language=de |access-date=2013-08-01 |archive-date=2018-03-16 |archive-url=https://web.archive.org/web/20180316161403/http://wirtschaftslexikon.gabler.de/Definition/soziale-marktwirtschaft.html |url-status=live }}</ref>

Ordoliberals are also known for pursuing a minimum [[configuration management|configuration of vital resources]] and [[progressive tax]]ation.<ref>{{cite web |url=http://toulouse-justice-2011.fr/fullpapers/b4woersdorfer.pdf |title=Archived copy |access-date=2012-11-09 |url-status=dead |archive-url=https://web.archive.org/web/20131203004642/http://toulouse-justice-2011.fr/fullpapers/b4woersdorfer.pdf |archive-date=2013-12-03}}</ref> The ordoliberal emphasis on the [[privatization]] of [[public services]] and other public firms such as [[telecommunication]] services;<ref name="ifw-kiel.de"/> [[redistribution of wealth|wealth redistribution]] and [[minimum wage]] laws as [[regulative principle]]s makes clear the links between this [[economic model]] and the [[social market economy]].<ref>{{cite book |url=https://books.google.com/books?id=e2UIjKCfRosC&pg=PA13 |title=Greening EU Competition Law and Policy |first=Suzanne |last=Kingston |publisher=[[Cambridge University Press]] |year=2011 |access-date=1 August 2013 |isbn=9781139502788 |via=[[Google Books]]}}</ref>

[[Wilhelm Röpke]] considered ordoliberalism to be "liberal conservatism", against [[capitalism]] in his work {{lang|la|Civitas Humana}} ("A [[Humane]] Order of Society", 1944). {{lang|de|[[Alexander Rüstow]]|italics=no}} also criticized [[laissez-faire]] [[capitalism]] in his work {{lang|de|Das Versagen des Wirtschaftsliberalismus|italic=yes}} ("The Failure of Economic Liberalism", 1950). The ordoliberals thus separated themselves from [[classical liberal]]s<ref name="Megay"/><ref>{{cite journal |last=Friedrich |first=Carl J. |year=1955|title=The Political Thought of Neo-Liberalism |journal=[[American Political Science Review]] |volume=49 |issue=2 |pages=509–525 |doi=10.2307/1951819 |jstor=1951819 |s2cid=145643424}}</ref> and valued the idea of [[social justice]].<ref>{{cite book |first=Walter |last=Oswalt |chapter=Zur Einführung: Walter Eucken (1891–1950) |trans-chapter=Introduction: Walter Eucken (1891–1950) |editor1-first=Nils |editor1-last=Goldschmidt |editor2-first=Michael |editor2-last=Wohlgemuth |title=Grundtexte zur Freiburger Tradition der Ordnungsökonomik |trans-title=Basic texts on the Freiburg tradition of order economics |isbn=978-3-16-148297-7 |page=128 |language=de |year=2008|publisher=Mohr Siebeck }}</ref> "[[Social security]] and social justice", wrote {{lang|de|Eucken|italic=no}}, "are the greatest concerns of our time".<ref>{{Cite book |author=OSO |title=Ordoliberalism: A New Intellectual Framework for Competition Law |publisher=Oxfordscholarship.com |date=1999 |doi=10.1093/acprof:oso/9780199244010.001.0001 |isbn=9780199244010}}</ref>

{{lang|fr|[[Michel Foucault]]|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 {{lang|de|[[Max Weber]]|italic=no}}. That is, both recognise the "[[irrational]] [[rational]]ity" of the [[capitalist system]], but not the "[[dialectical materialism|logic of contradiction]]" that [[Karl Marx|Marx]] posited. Both groups took up the same problem, but in vastly different directions.<ref>{{cite book |last=Foucault |first=Michel |title=The Birth of Biopolitics: Lectures at the College de France (1978–9) |translator-first=Graham |translator-last=Burchell |editor-first=Michael |editor-last=Senellart |edition=1st Picador Paperback |location=New York |publisher=[[Palgrave MacMillan]] |year=2010 |title-link=The Birth of Biopolitics |page=105}}</ref> The political philosophy of Ordoliberals was influenced by [[Aristotle]], {{lang|fr|[[Alexis de Tocqueville|de Tocqueville]]|italic=no}}, {{lang|de|[[Georg Wilhelm Friedrich Hegel|Hegel]]|italic=no}}, {{lang|de|[[Oswald Spengler|Spengler]]|italic=no}}, {{lang|de|[[Karl Mannheim|Mannheim]]|italic=no}}, {{lang|de|[[Max Weber|Weber]]|italic=no}}, and {{lang|de|[[Edmund Husserl|Husserl]]|italic=no}}.<ref>{{cite book |last=Foucault |first=Michel |title=The Birth of Biopolitics: Lectures at the College de France (1978–9) |translator-first=Graham |translator-last=Burchell |editor-first=Michael |editor-last=Senellart |edition=1st Picador Paperback |location=New York |publisher=[[Palgrave MacMillan]] |year=2010 |title-link=The Birth of Biopolitics |pages=103–105}}</ref>

== Criticism ==
According to {{lang|de|Sebastian Dullien|italic=no}} and {{lang|de|[[Ulrike Guérot]]|italic=no}}, ordoliberalism is central to the German approach to the [[European sovereign-debt crisis]], which has often led to conflicts with other European countries.<ref>{{cite book |first1=Sebastian |last1=Dullien |first2=Ulrike |last2=Guérot |author2-link=Ulrike Guérot |title=The Long Shadow of Ordoliberalism: Germany's Approach to the Euro Crisis |url=http://www.ecfr.eu/page/-/ECFR49_GERMANY_BRIEF_AW.pdf |isbn=978-1-906538-49-1 |location=London |publisher=[[European Council on Foreign Relations]] |year=2012 |access-date=2012-04-10 |archive-date=2016-10-24 |archive-url=https://web.archive.org/web/20161024092417/http://www.ecfr.eu/page/-/ECFR49_GERMANY_BRIEF_AW.pdf |url-status=live }}</ref>

== See also ==
* [[Allocative efficiency]]
* [[Christian Democracy]]
* [[Dirigisme]]
* [[Freiburg School]]
* [[Liberal conservatism]]
* [[Neoliberalism]]
* [[Radical centrism]]
* [[Social market economy]]

== References ==
{{reflist|30em}}

== Further reading ==
* {{cite book |editor1-last=Peacock |editor1-first=Alan |editor2-last=Willgerodt |editor2-first=Hans |title=Germany's Social Market Economy: Origins and Evolution |location=London |publisher=Macmillan |year=1989 |isbn=978-0-333-48563-7}}
* {{cite book |editor-last=Glossner |editor-first=Christian |title=The Making of the German Post-war Economy: Political Communication and Public Reception of the Social Market Economy After World War Two |location=London |publisher=I.B. Tauris |year=1989 |isbn=978-1-780-76421-4}}
* {{cite journal |last1=Nedergaard |first1=Peter |last2=Snaith |first2=Holly |author1-link=Peter Nedergaard |title='As I drifted on a river I could not control': the unintended ordoliberal consequences of the Eurozone crisis |journal=[[Journal of Common Market Studies]] |volume=53 |issue=5 |pages=1094–09 |doi=10.1111/jcms.12249 |date=September 2015 |s2cid=143248038}}

== External links ==
{{Wiktionary|ordoliberalism|ordoliberal}}
* {{lang|de|[http://www.asm-ev.de/ Aktionsgemeinschaft Soziale Marktwirtschaft]|italic=no}}, German Ordoliberal association.
* {{lang|de|[[Walter Eucken Institut]]|italic=no}}, German research institute in the tradition of ordoliberalism.
* {{lang|it|[http://www.tocqueville-acton.org Centro Studi Tocqueville-Acton]|italic=no}}, Italian Centre Studies on Social Market Economy and liberal tradition in the light of Catholic social thought.
* [https://www.degruyter.com/view/j/ordo ORDO official website]
* [https://www.jstor.org/journal/ordojahrordnwirt Back issues of ORDO Yearbook Vol. 1, Vol. 65 (1948–2014)] 

{{Freiburg school economists}}

{{DEFAULTSORT:Ordoliberalism}}
[[Category:Ordoliberalism| ]]
[[Category:Economic liberalism]]
[[Category:Economic policy in Europe]]
[[Category:Economy of Germany]]
[[Category:Freiburg School]]
[[Category:Ideologies of capitalism]]
[[Category:Liberalism]]
[[Category:Political ideologies]]