The Historical Context of Ordoliberalism’s Theoretical Development

Abstract

Abstract This chapter situates the theoretical development of Freiburg School Ordoliberalism in the historical context of the interwar and post-war periods. Beginning in the Weimar Republic, Böhm, Eucken, Röpke, Rüstow and others united in response to the crisis of liberalism and the rise of socialism. To save capitalism from internal self-destruction and the ‘collectivism’ of state planning and mass democracy, the Ordoliberals called for a ‘strong state’, capable of instituting the ‘competitive market order’, or what Müller-Armack and Erhard coined the ‘social market economy’. The Ordoliberal tradition developed through particular events (the Walter Lippmann Colloquium, Mont Pelerin Society, and ORDO journal), debates (with the Austrian School and Chicago School), and political parties (the CDU’s Ahlener Programme). From its interwar birth and the so-called ‘Economic Miracle’ (Wirtschaftswunder) of post-war West Germany, the chapter tracks Ordoliberalism’s trajectory up to its theoretical rapprochement with Constitutional Economics and Hayek’s arrival at the University of Freiburg.