Ordoliberalism is the German variant of economic liberalism that emphasizes the need for government to ensure that the free market produces results close to its theoretical potential.
Ordoliberal ideals became the foundation of the creation of the post-World War II German social market economy and its attendant Wirtschaftswunder. The term "ordoliberalism" (German: Ordoliberalismus) was coined in 1950 by Hero Moeller and refers to the academic journal ORDO.
The Freiburg school (German: Freiburger Schule) is a school of economic thought founded in the 1930s at the University of Freiburg.
It builds somewhat on the earlier historical school of economics but stresses that only some forms of competition are good, while others may require oversight. This is considered a lawful and legitimate role of government in a democracy in the Freiburg school. The Freiburg school provided the economic theoretical elements of ordoliberalism and the social market economy in post-war Germany.
The social market economy (SOME; German: soziale Marktwirtschaft, German pronunciation: [zoˌt͡si̯aːlə ˈmaʁktˌvɪʁtʃaft] ), also called Rhine capitalism, Rhine-Alpine capitalism, the Rhenish model, and social capitalism, is a socioeconomic model and ideology combining a free-market capitalist economic system with social policies and enough regulation to establish both fair competition within the market and generally a welfare state. It is sometimes classified as a regulated market economy. The social market economy was originally promoted and implemented in West Germany by the Christian Democratic Union under Chancellor Konrad Adenauer in 1949 and today it is used by ordoliberals, social liberals and social democrats alike. Its origins can be traced to the interwar Freiburg school of economic thought.
The social market economy was designed to be a middle way between laissez-faire forms of capitalism and socialist economics. It was strongly inspired by ordoliberalism, which was influenced by the political ideology of Christian democracy. Social market refrains from attempts to plan and guide production, the workforce, or sales but support planned efforts to influence the economy through the organic means of a comprehensive economic policy coupled with flexible adaptation to market studies. Combining monetary, credit, trade, tax, customs, investment, and social policies, as well as other measures, this type of economic policy aims to create an economy that serves the welfare and needs of the entire population, thereby fulfilling its ultimate goal.
Microeconomic reform (or often just economic reform) comprises policies directed to achieve improvements in economic efficiency, either by eliminating or reducing distortions in individual sectors of the economy or by reforming economy-wide policies such as tax policy and competition policy with an emphasis on economic efficiency, rather than other goals such as equity or employment growth.
"Economic reform" usually refers to deregulation, or at times to reduction in the size of government, to remove distortions caused by regulations or the presence of government, rather than new or increased regulations or government programs to reduce distortions caused by market failure. As such, these reform policies are in the tradition of laissez faire, emphasizing the distortions caused by government, rather than in ordoliberalism, which emphasizes the need for state regulation to maximize efficiency.
Conservative liberalism, also referred to as right-liberalism, is a variant of liberalism combining liberal values and policies with conservative stances, or simply representing the right wing of the liberal movement. In the case of modern conservative liberalism, scholars sometimes see it as a less radical variant of classical liberalism; it is also referred to as an individual tradition that distinguishes it from classical liberalism and social liberalism. Conservative liberal parties tend to combine economically liberal policies with more traditional stances and personal beliefs on social and ethical issues. Ordoliberalism is an influential component of conservative-liberal thought, particularly in its German, British, Canadian, French, Italian, and American manifestations.
In general, liberal conservatism and conservative liberalism have different philosophical roots. Historically, liberal conservatism refers mainly to the case where conservatives embrace the elements of classical liberalism, and conservative liberalism refers to classical liberals who support a laissez-faire economy as well as socially conservative principles. Since conservatives gradually accepted classical liberal institutions, there is very little to distinguish liberal conservatives from conservative liberals. Neoconservatism has also been identified as an ideological relative or twin to conservative liberalism, and some similarities exist also between conservative liberalism and national liberalism.
Walter Eucken (German: [ˈɔʏkn̩]; 17 January 1891 – 20 March 1950) was a German economist of the Freiburg school and father of ordoliberalism. Ordoliberalism was based on the concept of social market economy balancing free markets with regulatory oversight. The Walter Eucken Institut was founded four years after his death and his ideas influenced West Germany’s economic policy.