The Ideological Use and Abuse of Freiburg's Ordoliberalism

23 Pages Posted: 14 Jan 2021

See all articles by Malte F. Dold

Malte F. Dold

Pomona College - Department of Economics

Tim Krieger

University of Freiburg - Department of Economics

Date Written: 2020

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.

JEL Classification: B290, D430, E610, G180, P160

Suggested Citation

Dold, Malte F. and Krieger, Tim, The Ideological Use and Abuse of Freiburg's Ordoliberalism (2020). CESifo Working Paper No. 8811, Available at SSRN: https://ssrn.com/abstract=3765309

Malte F. Dold

Pomona College - Department of Economics ( email )

Claremont, CA 91711
United States

HOME PAGE: http://https://www.pomona.edu/directory/people/malte-dold

Tim Krieger (Contact Author)

University of Freiburg - Department of Economics ( email )

University of Freiburg
Wilhelmstr. 1b
Freiburg, D-79085
Germany

HOME PAGE: http://www.wguth.uni-freiburg.de

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