Revised 27 April 2014. See also my Uppsala University home page: http://www2.ibf.uu.se/PERSON/jim/backgr.html and my private home page:


This site will explore Ordoliberalism as a political, economic and social idea, and as a force for change. It has been a lifelong interest of mine, and sometimes called “The Third Way”, between unconstrained capitalism – what Wilhelm Röpke called the wild falls of laissez-faire on the one hand – and communism/state socialism on the other. Developed in Germany, Austria and Switzerland in the 1920s and 1930s, interwar years that saw the rise of National Socialism, it remains today little understood and in need of developing.

This is a vast subject and is an approach that has seen a lot of dilution of ideas. For this reason I am going back to the beginning and looking closer at the early work of the founders – An introduction on the Wikipedia page on Röpke above also has further reading in the form of books and manuscripts by and about Röpke that can be downloaded as pdf files.

Ludwig Erhard: Chancellor of Germany 1963-1966, Minister of Economics in the Konrad Adenauer Chancellorship from 1949-1963, making the social market economy part of the party political programme.

Wilhelm RöpkeAlfred Müller-Armack, Alexander Rüstow, Walter Eucken, Franz Böhm.

See also: Freiburg School

Mont Pelerin Society Later turned to neoliberalism under the influence of Friedrich Hayek and Milton Friedman, which is all the more reason to be familiar with this approach.

My idea boils down to looking at neoliberalism in relationship to ordoliberalism, and to understand that both are cyclical. In the modern era, we have seen how ordoliberalism in Germany worked to create German recovery from the Second World War, the so-called economic miracle, with its minor burst of ordoliberalism in Sweden doing much the same only with much less impact on European power relationships, but that the rise of neoliberalism in the US under Reagan and in Europe in the wake of Thatcherism put a stop to ordoliberalism and boosted neoliberalism.

The trouble with the neoliberal proponents like Hayek and Friedman is that they preached free markets but turned a blind eye to the massive state interference needed to rescue the banks, which placed the burden on the taxpayer to do the rescuing. This is a major reason why neoliberalism with its focus on flat, low-income tax rates creates poverty and enriches the wealthy. Or perhaps the likes of Friedman and Hayek knew this was likely but saw this as an advantage, or at least turned a blind eye to this form of interference by the state in their “pure” market! Ordoliberal measures to minimise oligopoly by encouraging a wide range of small and medium-sized enterprises were early on developed to counter this. Yet as neoliberalism became increasingly globally dominant the international competition needed to survive meant that oligopoly would grow.

This is where we are now. But ordoliberalism is still there, especially in Germany, Austria and Switzerland. But even Sweden has remnants of ordoliberalism in the form of budget discipline even though counter-cyclicality is no more.

In short, I would suggest that Karl Polanyi’s The Great Transformation (1944) needs to be updated by the new cycle of change in which ordoliberalism is minimised when neoliberalism is in a period of boom. The two cycles work in tandem such that when neoliberalism eventually burns itself out ordoliberalism gets a boost, and vice versa. See also the page “Is Ordoliberalism Cyclical?”.

This is a  very simplified explanation that will need filling out. The work has already been begun in the work of Margaret Somers and more recently Fred Block, as well as numerous other international researchers in the Karl Polanyi Archive as part of The Karl Polanyi Institute of Political Economy. But it is a major task that I do not propose to attempt on any sustained scale, and needs to be taken up by younger researchers earlier in their research careers.

There is also a British researcher, Gareth Dale at Brunel University in London who has already done exciting work by bringing a new critical perspective to our understanding of the European Union. The latest posts are all based on his work that has made major new progress on or understanding of Karl Polanyi. His book Karl Polanyi: the limits of the market (Polity Press, 2010) is well worth reading. It has already been reprinted in 2010, 2011, 2012 and 2013. This is very encouraging and bodes well for the future of research in this field.


1 Response to About

  1. Pingback: The EU’s Ugly Kindergarten of Intellectually Challenged Clowns | EU: Ramshackle Empire

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