Ordoliberalism inverted classical liberalism by making economic effectiveness depend on political and legal systems

Evidence

As legal theorist David Gerber notes, this notion “turned the core idea of classical liberalism … on its head by arguing that the effectiveness of the economy depended on its relationship to the political and legal systems.” Although early ordoliberal work during the Nazi period gave primacy to a strong state as the promoter of such an order, this view changed over time—and circumstance—to the position that economic policy should not be dictated by a strong state, especially one that could be captured. Rather, the state needed to be strong enough only to provide an “order,” an Ordo, and a consequent Ordnungspolitik, an “order-based policy,” whereby the legal framework governing action both by firms and the state together forms the economic constitution critical, according to the Freiburgers, to any successful economy. Ordnungspolitik therefore restrains both the state that practices it, and the private sector that grows within it, through the indirect regulation of the economic constitution. — Mark Blyth, Austerity, 362

Categorization

• DEFINE: Defines Ordnungspolitik (‘order-based policy’) and the core ordoliberal inversion of classical liberalism.
• XREF: Ordoliberalism’s ‘economic constitution’ framing connects to Mattei’s account of how austerity was installed as constitutional rule. — connects to: Liberal legal forms have progressive functions beyond serving capitalist calculation — Rolf Wiggershaus, The Frankfurt School: Its History,…, 933; Austrian economics constituted the original reactionary rejection of state-managed liberalism — Mark Blyth, Austerity: The History of a Dangerous…, 315; German ordoliberalism inverted the classical liberal problem of limiting the state — Michel Foucault, The Birth of Biopolitics: Lectures at…, 560 (+9 more)

Broader Connections

• German ordoliberalism inverted the classical liberal problem of limiting the state #expands (0.92) — Michel Foucault, The Birth of Biopolitics, 560
• Ordoliberalism departed from classical liberalism by grounding markets in a constitutional framework #expands (0.88) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1087
• Ordoliberalism makes state policy the guardian of fragile market mechanisms #expands (0.80) — Michel Foucault, The Birth of Biopolitics, 1258
• Ordoliberals saw the economic constitution as imposed by deliberate political will from above #expands (0.78) — Quinn Slobodian, Globalists, 697