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IN THE SHADOW OF ORDOLIBERALISM: THE PARADOX OF NEOLIBERALISM IN THE 21ST CENTURY

Philip G. Cerny

Abstract


Abstract

Neoliberalism and Ordoliberalism grew out of the same debates in the 1930s and 1940s but increasingly diverged in the postwar period. Anglo-American neoliberalism became associated with laissez faire economics, whereas Ordoliberalism (closely associated with what was called neoliberalism in Germany) is about a strong ‘constitutive rule-based economic order’. Nevertheless, the core dynamic of both Ordoliberalism and so-called ‘paleoliberal’ neoliberalism is marketisation. Efficient markets, regulated by the price mechanism, are seen as the raison d’être of successful capitalism. For both, the most crucial condition for market efficiency is competition. However, they diverge on the requirements for effective competition. Anglo-American neoliberals see the market as a ‘spontaneous order’ with a minimal role for the state while Ordoliberals believe markets left to their own devices are prone to systemic anti-competitive cartellisation and rent-seeking by capitalists, labour unions and bureaucrats. Competition therefore must be promoted, enabled and enforced by a strong pro-competitive state through ‘commodifying’ regulation. However, both Orodliberalism and Anglo-American neoliberalism in practice have involved extensive ad hoc re-regulation in response to complex, unforeseen events such as the global financial and Eurozone crises and other market failures and inefficiencies. They have become more regulatory and interventionist de facto, what I call ‘post-Ordoliberalism’.

Keywords: Neoliberalism, post-Ordoliberalism, competition, regulation, globalisation

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Bibliography: Cerny, Philip G.: In the Shadow of Ordoliberalism: The Paradox of Neoliberalism in the 21st Century, ERIS, 1-2016, pp. 78-92. https://doi.org/10.3224/eris.v3i1.5

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