Ordoliberalism and Ex-Warsaw Pact Countries

Jane Ball has uploaded an academia.edu draft paper on “The Incomprehensible Post-Communist Privatisation” forthcoming in The Global Journal of Comparative Law. In this paper the author, Liviu Damsa, a Ph.D. student at the Warwick University School of Law relates the choices of Ex-Warsaw Pact member countries of the EU.

I have argued that ex-Warsaw Pact countries have all opted for the neoliberal model. This stemmed originally from my experiences visiting Hungary as a young teenager, where I saw how the struggle of ex-Warsaw Pact countries to increase the consumption of their populations led to their adoption of neoliberalism. One of my uncles had bought a Volkswagen Beetle that he proudly polished to a shine and affectionately calling it  “my foxy”.

I have discussed the asset-stripping of East European rental housing at rock-bottom prices in From Public Housing to the Social Market (Routledge, 1995, see especially “The Anglo-Saxon hegemony and Eastern Europe” pp. 148-150). I felt that along with this choice came the downside that exposes these countries to attaining high home ownership rates as the universal panacea. This is something that Ivan Tosics, one of Hungary’s leading housing researchers, said to me when I asked him some time in the early 1990s. The EU has also adopted this approach. See The Strength of Ordoliberalism (1), (2), and (3) on this blog. See also the work of Gareth Dale The Limits of the Market also discussed on this blog.

This really should have its own post on Ordoliberalism, but I will summarise the start of Liviu Damsa’s abstract here:

“In this article I analyse one of the most important claims of the neoliberal policy prescriptions for Central and East European states in the early 1990s that “communist” property should be “privatised”. My claim is that this neoliberal policy prescription was based on a number of false assumptions about what [it] was “communist” property, and a number of false assumptions about communist law. As a result of these assumptions, the post-communist process of privatisation was plagued by a host of unintended and negative consequences. Nevertheless, based on these false assumptions, the neoliberal ideology was capable of portraying the privatisation as “rights based” and as essentially a democratic process.”

Roger Ledger also has a post uploaded to academia.edu on Neo-liberal thought and Thatcherism. From the abstract it seems he argues that Britain does have elements of ordoliberalism. I am less sure about this, as it cannot be determined from the abstract. But Britain being my home country, which is the home of Thatcherism I would be surprised if this were the case, and if so how it would affect British vulnerability to the subprime mortgage crisis. Last time round Britain was the first country to follow the USA over the lemming cliff that resulted in sovereign debt, bank runs and economic crisis. So what elements of ordoliberalism have been adopted that minimise the crisis? It is true that Britain has not had the massive crises that so many US states have had, particularly cities like Detroit and more generally in California. Perhaps Roger has reasoned around this?

More generally, there seems to be a growing interest in ordoliberalism among BRICS countries. The Brazilian blog http://tartarugademocratica.wordpress.com discusses the ordoliberalism policies of the Centre-Right Party in Brazil. I cannot read Portuguese so am unable to say much about it, but this post on Sweden shows that the author is serious about ordoliberalism. Again, I would like to know more about how such a switch is possible when there are no in-between tenures other than home ownership, home owership, private renting or a small public rental sector with very long waiting times. Sweden has a co-operative tenure (bostadsrätt), which makes a big difference. And how about banks? Switzerland has its cantonal banks, and Germany has landesbanks. Vienna has a similar system. See my post on this blog, German Ordoliberalism.

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