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The difficult relationship between historical ordoliberalism and Adam Smith

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  • Horn, Karen

Abstract

Ever since the global financial crisis of 2008, interpreted by some observers as a foreseeable failure of "unfettered" capitalism, the German intellectual tradition of ordoliberalism has been meeting with increased interest. Its emphasis on good government, appropriate rules and institutions makes it attractive. Welcome as this may be, however, that trend may impact the reception of the works of Adam Smith in a problematic way, since the key historical figures of ordoliberalism reject his theory vigorously, even though, from today's perspective, their concerns and policy recommendations look very parallel to his. Their common hope is human flourishing. Just like the Scot, the broad scope of their vision encompasses society as a whole, not just the market; they are concerned with ethics, not just economics. But what, then, can solve the puzzle of this implausible rejection, by which the ordoliberals contribute to a deep-rooted prejudice against Smith? In this paper, Karen Horn takes stock of their concrete criticisms, which turn out to be based on a narrow understanding of Smith's work. She suggests that it is religion that stands at the root of the explanation, though situational elements may also play a role. The essential contentious point seems to be what the ordoliberals take for the Scot's naïve belief in natural harmony, the sources of which they see in his stoicism and possible deism. The deeper problem for them with Smith is the pagan flavour and the systematic normative relativism of an essentially evolutionary approach to human values.

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  • Horn, Karen, 2019. "The difficult relationship between historical ordoliberalism and Adam Smith," Freiburg Discussion Papers on Constitutional Economics 19/3, Walter Eucken Institut e.V..
  • Handle: RePEc:zbw:aluord:1903
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    References listed on IDEAS

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    Cited by:

    1. K. Horn, 2022. "Ordoliberalism: neither exclusively German nor an oddity. A review essay of Malte Dold’s and Tim Krieger’s Ordoliberalism and European Economic Policy: Between Realpolitik and Economic Utopia," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 35(4), pages 547-560, December.

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    More about this item

    Keywords

    Ordoliberalism; Adam Smith; History of economic thought; Natural harmony;
    All these keywords.

    JEL classification:

    • B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
    • B3 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals

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