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Ordo-theory - ordo-policy: What is neo-liberalism?

Author

Listed:
  • Viktor. J. Vanberg
  • Heiner Flassbeck
  • Friederike Spiecker
  • Wernhard Möschel
  • Peter Hampe
  • Hans-Werner Sinn

Abstract

Neo-liberalism has been discredited as a result of the financial crisis. But what is neo-liberalism really? Viktor J. Vanberg, Walter Eucken Institute, Freiburg, defines ordo-theory as the economic and juridical research programme of the Freiburg School and related approaches that direct attention to the control effects exerted by the legal and institutional framework conditions on economic processes. Ordo-policy is the applied branch of this research programme. Ordo-liberal economics directs its research interests to the question of how the institutional framework conditions, under which individuals act and collaborate, can be shaped such that optimal prospects prevail, enabling individuals to pursue their own goals in reciprocal, compatible freedom. For Wernhard Möschel, University of Tübingen, a market-economy order is not conceivable without some norms. Within the neo-liberal approach, room remains for supplementary and correcting policies. Heiner Flassbeck, UNCTAD, and Friederike Spiecker regard neo-liberalism "with its undifferentiated concept of reducing the state to an ordo-political minimum for the organisation of free competition in free markets" as having failed. Economic policy must be given clear priority over the speculation-prone markets. Peter Hampe, Technical University of Dresden and Munich University for Political Science, examines the history of neo-liberalism and explains the difference between neo- and paleo-liberalism. Hans-Werner Sinn explains the position of neo-liberalism with a football analogy: good players and a ball in themselves are no guarantee for a successful match. For the game to be fair and not to end up in chaos, rules must apply and a referee must ensure that these rules are followed.

Suggested Citation

  • Viktor. J. Vanberg & Heiner Flassbeck & Friederike Spiecker & Wernhard Möschel & Peter Hampe & Hans-Werner Sinn, 2010. "Ordo-theory - ordo-policy: What is neo-liberalism?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 63(09), pages 03-20, May.
    • Handle: RePEc:ces:ifosdt:v:63:y:2010:i:09:p:03-20
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    References listed on IDEAS

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    1. Hans–Werner Sinn, 2002. "Der neue Systemwettbewerb," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 3(4), pages 391-407, November.
    2. Sinn, Hans-Werner, 1997. "The selection principle and market failure in systems competition," Journal of Public Economics, Elsevier, vol. 66(2), pages 247-274, November.
    3. Peter Spencer, 2002. "Can National Banking Systems Compete?. A Comment on the Paper by Hans-Werner Sinn," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 59(3), pages 336-339, August.
    4. Hans‐Werner Sinn, 2004. "The New Systems Competition," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 5(1), pages 23-38, February.
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    JEL classification:

    • P00 - Political Economy and Comparative Economic Systems - - General - - - General

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