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The ideological use and abuse of Freiburg’s ordoliberalism

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  • Malte Dold

    (Pomona College)

  • Tim Krieger

    (University of Freiburg)

Abstract

In the aftermath of the Eurozone crisis, a battle of ideas emerged over whether ordoliberalism is part of the cause or the solution of economic problems in Europe. While German ordoliberals argued that their policy proposals were largely ignored before, during and after the crisis, critics saw too much ordoliberal influence, especially in form of austerity policies. We argue that neither view is entirely correct. Instead, we observe that the battle of ideas is largely independent of the countries’ actual responses to the Eurozone crisis: pragmatic self-interest on behalf of governments rather than their ideological convictions played a crucial role in political reactions. We explain this dynamic game-theoretically and highlight a number of reasons for the decoupling of the political-pragmatic debate from the ideological-academic discourse. In addition, we argue that ordoliberals themselves contributed to the ideological misuse of their own program: the ordoliberal Freiburg School ceased to be an active research program and instead grew to resemble a tradition which all too often disregarded the international academic discourse, in particular in macroeconomics. As a result, ordoliberal thinking was abused by its proponents and critics alike to emphasize their preconceived Weltanschauung (worldview). We end our paper with some thoughts on how a contemporary ordoliberalism can be constructively used to react to some of the challenges of the ongoing Eurozone crisis.

Suggested Citation

  • Malte Dold & Tim Krieger, 2023. "The ideological use and abuse of Freiburg’s ordoliberalism," Public Choice, Springer, vol. 195(3), pages 341-361, June.
  • Handle: RePEc:kap:pubcho:v:195:y:2023:i:3:d:10.1007_s11127-021-00875-0
    DOI: 10.1007/s11127-021-00875-0
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    Cited by:

    1. Lars P. Feld & Daniel Nientiedt, 2023. "The Freiburg School and the Virginia School: introduction to the special issue," Public Choice, Springer, vol. 195(3), pages 193-196, June.
    2. Dold, Malte & Krieger, Tim, 2024. "Market democracy, rising populism, and contemporary ordoliberalism," Discussion Paper Series 2024-01, University of Freiburg, Wilfried Guth Endowed Chair for Constitutional Political Economy and Competition Policy.
    3. Kolev, Stefan, 2021. "When liberty presupposes order: F. A. Hayek's learning ordoliberalism," Freiburg Discussion Papers on Constitutional Economics 21/2, Walter Eucken Institut e.V..
    4. Krieger, Tim & Nientiedt, Daniel, 2022. "The renaissance of ordoliberalism in the 1970s and 1980s," Discussion Paper Series 2022-05, University of Freiburg, Wilfried Guth Endowed Chair for Constitutional Political Economy and Competition Policy.

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    More about this item

    Keywords

    Freiburg school; Ordoliberalism; Eurozone crisis; Austerity; Ideology;
    All these keywords.

    JEL classification:

    • B29 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Other
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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