Germany’s economy is booming

While the rest of the world is in the economic doldrums, Germany’s economy is growing at a rate of 9%, the best it has done since unification.  What is its secret?

Germany has sparred with its European partners over how to respond to the financial crisis, argued with the United States over the benefits of stimulus versus austerity, and defiantly pursued its own vision of how to keep its economy strong.

Statistics released Friday buttress Germany’s view that it had the formula right all along. The government on Friday announced quarter-on-quarter economic growth of 2.2 percent, Germany’s best performance since reunification 20 years ago — and equivalent to a nearly 9 percent annual rate if growth were that robust all year.

The strong growth figures will also bolster the conviction here that German workers and companies in recent years made the short-term sacrifices necessary for long-term success that Germany’s European partners did not. And it will reinforce the widespread conviction among policy makers that they handled the financial crisis and the painful recession that followed it far better than the United States, which, they never hesitate to remind, brought the world into this crisis.

A vast expansion of a program paying to keep workers employed, rather than dealing with them once they lost their jobs, was the most direct step taken in the heat of the crisis. But the roots of Germany’s export-driven success reach back to the painful restructuring under the previous government of Chancellor Gerhard Schröder.

By paring unemployment benefits, easing rules for hiring and firing, and management and labor’s working together to keep a lid on wages, Germany ensured that it could again export its way to growth with competitive, nimble companies producing the cars and machine tools the world’s economies — emerging and developed alike — demanded.

Germans steered clear of the debt-fueled consumption boom that many believe contributed to the financial crisis. During the recession, Chancellor Angela Merkel resisted the palliative of government spending that the United States and some European partners felt was crucial to restoring growth.

via Defying Others, Germany Finds Economic Success – NYTimes.com.

About Gene Veith

Professor of Literature at Patrick Henry College, the Director of the Cranach Institute at Concordia Theological Seminary, a columnist for World Magazine and TableTalk, and the author of 18 books on different facets of Christianity & Culture.

  • Porcell

    The German people, when not in the grips of some leftist or rightist ideolog, are disciplined, hardworking, sensible people who know how to save and be restrained with their economic policy.

    How ironic that the Americans, thought to be a sensible and pragmatic people, are at present involved in private and public debt up to their eyeballs with the consequent anemic potential for economic growth. All of this could be changed with more private and public financial discipline, though realistically it probably won’t, mainly due to the fantasies of the baby boomers and the lack of seriousness of many young people. Any people that could elect such an incompetent fool as Obama will in the long run deservedly fail.

  • Porcell

    The German people, when not in the grips of some leftist or rightist ideolog, are disciplined, hardworking, sensible people who know how to save and be restrained with their economic policy.

    How ironic that the Americans, thought to be a sensible and pragmatic people, are at present involved in private and public debt up to their eyeballs with the consequent anemic potential for economic growth. All of this could be changed with more private and public financial discipline, though realistically it probably won’t, mainly due to the fantasies of the baby boomers and the lack of seriousness of many young people. Any people that could elect such an incompetent fool as Obama will in the long run deservedly fail.

  • Tom Hering

    “Any people that could elect such an incompetent fool as Obama will in the long run deservedly fail.” – Porcell @ 1.

    Okay, but it’s the same country that elected Nixon, Reagan and Bush – twice, twice and twice.

    Four Deformations of the Apocalypse.

  • Tom Hering

    “Any people that could elect such an incompetent fool as Obama will in the long run deservedly fail.” – Porcell @ 1.

    Okay, but it’s the same country that elected Nixon, Reagan and Bush – twice, twice and twice.

    Four Deformations of the Apocalypse.

  • http://www.bikebubba.blogspot.com Bike Bubba

    Porcell, yes, but keep in mind that Germany had for the previous 60 years enacted law after law to extend the safety net, so this is a good about face.

    And, ahem, a strong rebuke the Keynesian fantasies indulged by the Federal Reserve and the Obama administration. Go figure that when you reduce the barriers to unemployment and incentives to unemployment, you will get the behavior that you like.

  • http://www.bikebubba.blogspot.com Bike Bubba

    Porcell, yes, but keep in mind that Germany had for the previous 60 years enacted law after law to extend the safety net, so this is a good about face.

    And, ahem, a strong rebuke the Keynesian fantasies indulged by the Federal Reserve and the Obama administration. Go figure that when you reduce the barriers to unemployment and incentives to unemployment, you will get the behavior that you like.

  • Porcell

    Here is part 1 of a 5 part video interview with Thomas Sowell, one of the better minds in America. His theme is the dismantling and collapse of America by the left including Obama.

  • Porcell

    Here is part 1 of a 5 part video interview with Thomas Sowell, one of the better minds in America. His theme is the dismantling and collapse of America by the left including Obama.

  • Louis

    The postwar reconstruction of Germany was done following the economic philosophy of Roepke, Bohm and others – Ordoliberalism. Wikipedia defines Ordoliberalism as “a school of liberalism that emphasises the need for the state to ensure that the free market produces results close to its theoretical potential “. It continues by saying –

    Ordoliberal theory holds that the state must create a proper legal environment for the economy and maintain a healthy level of competition through measures that adhere to market principles.[1] The concern is that, if the state does not take active measures to foster competition, firms with monopoly (or oligopoly) power will emerge, which will not only subvert the advantages offered by the market economy, but also possibly undermine good government, since strong economic power can be transformed into political power. Quoting Stephen Padgett: “A central tenet of ordo-liberalism is a clearly defined division of labor in economic management, with specific responsibilities assigned to particular institutions. Monetary policy should be the responsibility of a central bank committed to monetary stability and low inflation, and insulated from political pressure by independent status. Fiscal policy—balancing tax revenue against government expenditure—is the domain of the government, whilst macro-economic policy is the preserve of employers and trade unions.” The state should form an economical order instead of directing economical processes.

    Thus neither laissez-faire economics, nor socialism. In my mind, Ordoliberalism has a clearly defined role for the state, not as the avancular sky-uncle, nor as the nanny, nor as the folks who should stay out of my business. It avoida the trap of von Mises and co who seems to have apelagian world view, namely that men, when left alone, will create the best economic system all by themselves. But neither deos it attempt to control and direct everything. In essence, it is maininting law and order within the economic realm, looking after the interests of both big and small.

    As you can tell, I consider myself (though I’m no economist) an Ordoliberal.

  • Louis

    The postwar reconstruction of Germany was done following the economic philosophy of Roepke, Bohm and others – Ordoliberalism. Wikipedia defines Ordoliberalism as “a school of liberalism that emphasises the need for the state to ensure that the free market produces results close to its theoretical potential “. It continues by saying –

    Ordoliberal theory holds that the state must create a proper legal environment for the economy and maintain a healthy level of competition through measures that adhere to market principles.[1] The concern is that, if the state does not take active measures to foster competition, firms with monopoly (or oligopoly) power will emerge, which will not only subvert the advantages offered by the market economy, but also possibly undermine good government, since strong economic power can be transformed into political power. Quoting Stephen Padgett: “A central tenet of ordo-liberalism is a clearly defined division of labor in economic management, with specific responsibilities assigned to particular institutions. Monetary policy should be the responsibility of a central bank committed to monetary stability and low inflation, and insulated from political pressure by independent status. Fiscal policy—balancing tax revenue against government expenditure—is the domain of the government, whilst macro-economic policy is the preserve of employers and trade unions.” The state should form an economical order instead of directing economical processes.

    Thus neither laissez-faire economics, nor socialism. In my mind, Ordoliberalism has a clearly defined role for the state, not as the avancular sky-uncle, nor as the nanny, nor as the folks who should stay out of my business. It avoida the trap of von Mises and co who seems to have apelagian world view, namely that men, when left alone, will create the best economic system all by themselves. But neither deos it attempt to control and direct everything. In essence, it is maininting law and order within the economic realm, looking after the interests of both big and small.

    As you can tell, I consider myself (though I’m no economist) an Ordoliberal.

  • Louis

    The postwar reconstruction of Germany was done following the economic philosophy of Roepke, Bohm and others – Ordoliberalism. Wikipedia defines Ordoliberalism as “a school of liberalism that emphasises the need for the state to ensure that the free market produces results close to its theoretical potential “. It continues by saying –
    Ordoliberal theory holds that the state must create a proper legal environment for the economy and maintain a healthy level of competition through measures that adhere to market principles.[1] The concern is that, if the state does not take active measures to foster competition, firms with monopoly (or oligopoly) power will emerge, which will not only subvert the advantages offered by the market economy, but also possibly undermine good government, since strong economic power can be transformed into political power. Quoting Stephen Padgett: “A central tenet of ordo-liberalism is a clearly defined division of labor in economic management, with specific responsibilities assigned to particular institutions. Monetary policy should be the responsibility of a central bank committed to monetary stability and low inflation, and insulated from political pressure by independent status. Fiscal policy—balancing tax revenue against government expenditure—is the domain of the government, whilst macro-economic policy is the preserve of employers and trade unions.” The state should form an economical order instead of directing economical processes.

  • Louis

    The postwar reconstruction of Germany was done following the economic philosophy of Roepke, Bohm and others – Ordoliberalism. Wikipedia defines Ordoliberalism as “a school of liberalism that emphasises the need for the state to ensure that the free market produces results close to its theoretical potential “. It continues by saying –
    Ordoliberal theory holds that the state must create a proper legal environment for the economy and maintain a healthy level of competition through measures that adhere to market principles.[1] The concern is that, if the state does not take active measures to foster competition, firms with monopoly (or oligopoly) power will emerge, which will not only subvert the advantages offered by the market economy, but also possibly undermine good government, since strong economic power can be transformed into political power. Quoting Stephen Padgett: “A central tenet of ordo-liberalism is a clearly defined division of labor in economic management, with specific responsibilities assigned to particular institutions. Monetary policy should be the responsibility of a central bank committed to monetary stability and low inflation, and insulated from political pressure by independent status. Fiscal policy—balancing tax revenue against government expenditure—is the domain of the government, whilst macro-economic policy is the preserve of employers and trade unions.” The state should form an economical order instead of directing economical processes.

  • Louis

    Thus neither laissez-faire economics, nor socialism. In my mind, Ordoliberalism has a clearly defined role for the state, not as the avuncular sky-uncle, nor as the nanny, nor as the folks who should stay out of my business. It avoids the trap of von Mises and co who seem to have a pelagian world view, namely that men, when left alone, will create the best economic system all by themselves. But neither does it attempt to control and direct everything. In essence, it is maintaining law and order within the economic realm, looking after the interests of both big and small.

    As you can tell, I consider myself (though I’m no economist) an Ordoliberal.

  • Louis

    Thus neither laissez-faire economics, nor socialism. In my mind, Ordoliberalism has a clearly defined role for the state, not as the avuncular sky-uncle, nor as the nanny, nor as the folks who should stay out of my business. It avoids the trap of von Mises and co who seem to have a pelagian world view, namely that men, when left alone, will create the best economic system all by themselves. But neither does it attempt to control and direct everything. In essence, it is maintaining law and order within the economic realm, looking after the interests of both big and small.

    As you can tell, I consider myself (though I’m no economist) an Ordoliberal.

  • Louis

    Thus neither laissez-faire economics, nor s0c1al1sm. In my mind, Ordoliberalism has a clearly defined role for the state, not as the avuncular sky-uncle, nor as the nanny, nor as the folks who should stay out of my business. It avoids the trap of von Mises and co who seem to have a pelagian world view, namely that men, when left alone, will create the best economic system all by themselves. But neither does it attempt to control and direct everything. In essence, it is maintaining law and order within the economic realm, looking after the interests of both big and small.

    As you can tell, I consider myself (though I’m no economist) an Ordoliberal.

  • Louis

    Thus neither laissez-faire economics, nor s0c1al1sm. In my mind, Ordoliberalism has a clearly defined role for the state, not as the avuncular sky-uncle, nor as the nanny, nor as the folks who should stay out of my business. It avoids the trap of von Mises and co who seem to have a pelagian world view, namely that men, when left alone, will create the best economic system all by themselves. But neither does it attempt to control and direct everything. In essence, it is maintaining law and order within the economic realm, looking after the interests of both big and small.

    As you can tell, I consider myself (though I’m no economist) an Ordoliberal.

  • Porcell

    Germany didn’t follow any such mad ideology as ordo-liberalism. It followed the social-democrat popolicy until recently it discovered the virtues of the austrian school including Hayek and Mises.

  • Porcell

    Germany didn’t follow any such mad ideology as ordo-liberalism. It followed the social-democrat popolicy until recently it discovered the virtues of the austrian school including Hayek and Mises.

  • Cincinnatus

    Porcell/Peter: I’m fairly certain ordo-liberalism (or we could call it the “Swiss” school of economics rather than the “Austrian” school) has been fairly influential in Germany of late, as “ordoliberal” policies are, to some degree, replicated in the platform of the Catholic, right-of-center “Christian Democrat” party that has been quite powerful for the last several years. Angela Merkel herself and her administration are deemed by scholars to be “ordoliberal,” so I’m not sure where your disagreements lie. Furthermore, you would find it difficult to describe Germany as a laissez-faire regime in any sense of the term.

    As a fan of Wilhelm Ropke, I have no problems with this.

  • Cincinnatus

    Porcell/Peter: I’m fairly certain ordo-liberalism (or we could call it the “Swiss” school of economics rather than the “Austrian” school) has been fairly influential in Germany of late, as “ordoliberal” policies are, to some degree, replicated in the platform of the Catholic, right-of-center “Christian Democrat” party that has been quite powerful for the last several years. Angela Merkel herself and her administration are deemed by scholars to be “ordoliberal,” so I’m not sure where your disagreements lie. Furthermore, you would find it difficult to describe Germany as a laissez-faire regime in any sense of the term.

    As a fan of Wilhelm Ropke, I have no problems with this.

  • CRB

    Interesting, pertinent article here:

    http://www.victorhanson.com/articles/hanson060810.html

  • CRB

    Interesting, pertinent article here:

    http://www.victorhanson.com/articles/hanson060810.html

  • Louis

    Porcell, it doesn’t mean that if you don’t like something, it isn’t true. Germany landed in trouble because it transitioned from Ordoliberalism to Kenyesian Economics.

    Your statement is complete bunk. Read this – http://www.servinghistory.com/topics/Ordoliberalism

    and especially this:http://ideas.repec.org/p/kln/iwpdip/dp01-07.html – download the pdf – it is entitled

    The Postwar West German Economic Transition:
    From Ordoliberalism to Keynesianism
    by
    Johannes R. B. Rittershausen
    IWP Discussion Paper No. 2007/1. The IWP is INSTITUT FÜR WIRTSCHAFTSPOLITIK
    AN DER UNIVERSITÄT ZU KÖLN

    Out of the horse’s mouth.

  • Louis

    Porcell, it doesn’t mean that if you don’t like something, it isn’t true. Germany landed in trouble because it transitioned from Ordoliberalism to Kenyesian Economics.

    Your statement is complete bunk. Read this – http://www.servinghistory.com/topics/Ordoliberalism

    and especially this:http://ideas.repec.org/p/kln/iwpdip/dp01-07.html – download the pdf – it is entitled

    The Postwar West German Economic Transition:
    From Ordoliberalism to Keynesianism
    by
    Johannes R. B. Rittershausen
    IWP Discussion Paper No. 2007/1. The IWP is INSTITUT FÜR WIRTSCHAFTSPOLITIK
    AN DER UNIVERSITÄT ZU KÖLN

    Out of the horse’s mouth.

  • Porcell

    The truth is that when government becomes involved in a free economy firms tend to become dependent rent-seeking entities. In a free economy firms need to pay attention to economic reality as opposed to government interests.

    Ordo-liberalism is a contradiction in terms. It was quite refuted by John Paul II in his encyclical “One Hundred Years.” John Paul, having lived under Hitler and Stalin quite understood the virtue of a free economy, though reasonably regulated to take account of fallen men. He well understood the evil of excess government. There is a fundamental difference between reasonable regulation and the absurdity of “ordo-liberalism” that involves ahybrid of private and govrnmrnt corporate entities.

  • Porcell

    The truth is that when government becomes involved in a free economy firms tend to become dependent rent-seeking entities. In a free economy firms need to pay attention to economic reality as opposed to government interests.

    Ordo-liberalism is a contradiction in terms. It was quite refuted by John Paul II in his encyclical “One Hundred Years.” John Paul, having lived under Hitler and Stalin quite understood the virtue of a free economy, though reasonably regulated to take account of fallen men. He well understood the evil of excess government. There is a fundamental difference between reasonable regulation and the absurdity of “ordo-liberalism” that involves ahybrid of private and govrnmrnt corporate entities.

  • Cincinnatus

    Porcell/Peter: You are aware that the official Catholic economic and social position constitutes something resembling ordo-liberalism and in some cases even a modified version of the social welfare state? If you are genuinely interested in the topic–and I’m not sure you are, as you seem to be seeking to prove an obstinate point rather than engaging in an earnest pursuit of wisdom–you should examine De Rerum Novarum by Pope Leo XIII and Quadragesimo Anno by Pope Pius XI. You might also look at Economic Justice for All, an official position paper published by the United States Conference of Bishops. Works by Hillaire Belloc, G. K. Chesteron, and Dorothy Sayers would also be instructive in clarifying Catholic economic teaching.

    I don’t agree with everything articulated in these documents, but asserting that the Church espouses a laissez-faire economy is factually untrue. Amongst other things, the Church insists upon a “just wage,” a social safety net, a prominent role for labor unions, and progressive taxation. They also advocate for free market principles, but only if it is distinctly limited by the former structures. It is no coincidence that many Catholics are inclined to vote for the economic policies of the Democratic Party, despite their pro-choice stance (which, yes, may possibly imply misplaced priorities).

    For its part, I’m not sure you entirely understand ordo-liberlism. A hefty dose of Wilhelm Ropke’s A Humane Economy will do a mind good.

    Finally, Milton Friedman confessed, practically on his deathbed, that the foundation of the free market is the rule of law, something your past enunciations indicate you might find worthy of approval, Peter. Similarly, Adam Smith’s theory of the “invisible hand” is incomprehensible and incomplete without his “theory of moral sentiments.”

    At root, ordo-liberals insist upon the level economic playing-field, which to them generally revolves around a limited government minimizing inflation (due to Germany’s horror of hyperinflation during the post-war years) and other relatively uncontroversial propositions. They also believe in encouraging vibrant local economies–hence the “humane” aspect of the “humane economy.” They explicitly reject the Keynesian overtures of the economies of both Germany and the United States. In any case, I’m not espousing anything here; I’m merely encouraging you to educate yourself. It’s a good read.

  • Cincinnatus

    Porcell/Peter: You are aware that the official Catholic economic and social position constitutes something resembling ordo-liberalism and in some cases even a modified version of the social welfare state? If you are genuinely interested in the topic–and I’m not sure you are, as you seem to be seeking to prove an obstinate point rather than engaging in an earnest pursuit of wisdom–you should examine De Rerum Novarum by Pope Leo XIII and Quadragesimo Anno by Pope Pius XI. You might also look at Economic Justice for All, an official position paper published by the United States Conference of Bishops. Works by Hillaire Belloc, G. K. Chesteron, and Dorothy Sayers would also be instructive in clarifying Catholic economic teaching.

    I don’t agree with everything articulated in these documents, but asserting that the Church espouses a laissez-faire economy is factually untrue. Amongst other things, the Church insists upon a “just wage,” a social safety net, a prominent role for labor unions, and progressive taxation. They also advocate for free market principles, but only if it is distinctly limited by the former structures. It is no coincidence that many Catholics are inclined to vote for the economic policies of the Democratic Party, despite their pro-choice stance (which, yes, may possibly imply misplaced priorities).

    For its part, I’m not sure you entirely understand ordo-liberlism. A hefty dose of Wilhelm Ropke’s A Humane Economy will do a mind good.

    Finally, Milton Friedman confessed, practically on his deathbed, that the foundation of the free market is the rule of law, something your past enunciations indicate you might find worthy of approval, Peter. Similarly, Adam Smith’s theory of the “invisible hand” is incomprehensible and incomplete without his “theory of moral sentiments.”

    At root, ordo-liberals insist upon the level economic playing-field, which to them generally revolves around a limited government minimizing inflation (due to Germany’s horror of hyperinflation during the post-war years) and other relatively uncontroversial propositions. They also believe in encouraging vibrant local economies–hence the “humane” aspect of the “humane economy.” They explicitly reject the Keynesian overtures of the economies of both Germany and the United States. In any case, I’m not espousing anything here; I’m merely encouraging you to educate yourself. It’s a good read.

  • Louis

    Purcell – nothing like a complete free market (anarch-capitalism) exists. I’m convinced that you don’t read what we post – however, as to your point about JP II – he is no laissez faire capitalist by any means, whatsoever. You can read the following paper from the Catholic Social Science Review archives : http://www.catholicsocialscientists.org/CSSR/Archival/1997/1997_117.pdf

    Let me highlight this paragraph:

    Indeed, an examination of Roepke’s “Third Way” and the ideas expressed in Centesimus Annus suggests that Roepke’s work may be useful as a guide to the formulation of a system of political economy which fulfills the expectations inherent in the social doctrine of the Catholic Church, and possibly in other Christian communions as well.

    Roepke, being one of the main economists of what is termed Ordoliberalism.

    Once again your statements are entirely false. Maybe read the following on Ordoliberalism, before you make these statements:

    http://www.kas.de/upload/dokumente/2010/06/60_Years_SME/woersdoerfer.pdf

  • Louis

    Purcell – nothing like a complete free market (anarch-capitalism) exists. I’m convinced that you don’t read what we post – however, as to your point about JP II – he is no laissez faire capitalist by any means, whatsoever. You can read the following paper from the Catholic Social Science Review archives : http://www.catholicsocialscientists.org/CSSR/Archival/1997/1997_117.pdf

    Let me highlight this paragraph:

    Indeed, an examination of Roepke’s “Third Way” and the ideas expressed in Centesimus Annus suggests that Roepke’s work may be useful as a guide to the formulation of a system of political economy which fulfills the expectations inherent in the social doctrine of the Catholic Church, and possibly in other Christian communions as well.

    Roepke, being one of the main economists of what is termed Ordoliberalism.

    Once again your statements are entirely false. Maybe read the following on Ordoliberalism, before you make these statements:

    http://www.kas.de/upload/dokumente/2010/06/60_Years_SME/woersdoerfer.pdf

  • Louis

    I see Cincinnatus and me cross – posted, suffice to say ditto!

  • Louis

    I see Cincinnatus and me cross – posted, suffice to say ditto!

  • Porcell

    The truth is that “ordo” liberalism is a euphemism for state controlled economy; basically a subtle form of socialism. A free economy, whatever its faults, always trumps the weak-minded, hand wringing anti-capitalists.

  • Porcell

    The truth is that “ordo” liberalism is a euphemism for state controlled economy; basically a subtle form of socialism. A free economy, whatever its faults, always trumps the weak-minded, hand wringing anti-capitalists.

  • Cincinnatus

    No, Porcell/Peter, ordoliberalism is not a euphemism for “state-controlled economy,” nor does it remotely resemble any form of socialism, subtle or otherwise. It isn’t even a hybrid of socialism and market economics. If you are going to comment on the merits of ordoliberalism, please learn what it is first.

  • Cincinnatus

    No, Porcell/Peter, ordoliberalism is not a euphemism for “state-controlled economy,” nor does it remotely resemble any form of socialism, subtle or otherwise. It isn’t even a hybrid of socialism and market economics. If you are going to comment on the merits of ordoliberalism, please learn what it is first.

  • http://www.toddstadler.com/ tODD

    Well, I guess between Porcell (@17) and I, only one of us learned anything about ordoliberalism today.

    Thanks for the information, Louis and Cincinattus. I can only take so much economics, but this sounds like the best fit for the thoughts I do have on the subject.

  • http://www.toddstadler.com/ tODD

    Well, I guess between Porcell (@17) and I, only one of us learned anything about ordoliberalism today.

    Thanks for the information, Louis and Cincinattus. I can only take so much economics, but this sounds like the best fit for the thoughts I do have on the subject.

  • ptl

    Porcell at 4…thanks very, very much for the link to NRO and the Hoover Institution videos….hope very much EVERYONE takes the time to enjoy…..Rupert Murdoch, Christopher Hitchens, Thomas Sorell, William F. Buckley Jr……and many, many more, right on Porcell, whoever you are :)

  • ptl

    Porcell at 4…thanks very, very much for the link to NRO and the Hoover Institution videos….hope very much EVERYONE takes the time to enjoy…..Rupert Murdoch, Christopher Hitchens, Thomas Sorell, William F. Buckley Jr……and many, many more, right on Porcell, whoever you are :)

  • Porcell

    Cincinnatus, the Western concept of a free economy doesn’t need some German theorists to pontificate on the rule of law and economic regulation. Adam Smith, the seminal thinker of a free economy, emphasized reasoned economic regulation within the context of a fundamentally free economy and a rule of law.

    When some German thinkers come up with a term ordoliberalism it’s time to make sure your wallet and liberty are secure. What’s happened in Germany in recent years is that the people and leaders have to some extent become disenchanted with the fuzzy underpinnings of social democracy and the nanny state. That, along with the discipline and work ethic of the German people, has made Germany the most enterprising and successful of the European nations.

  • Porcell

    Cincinnatus, the Western concept of a free economy doesn’t need some German theorists to pontificate on the rule of law and economic regulation. Adam Smith, the seminal thinker of a free economy, emphasized reasoned economic regulation within the context of a fundamentally free economy and a rule of law.

    When some German thinkers come up with a term ordoliberalism it’s time to make sure your wallet and liberty are secure. What’s happened in Germany in recent years is that the people and leaders have to some extent become disenchanted with the fuzzy underpinnings of social democracy and the nanny state. That, along with the discipline and work ethic of the German people, has made Germany the most enterprising and successful of the European nations.

  • Cincinnatus

    Porcell, I’m fairly certain the only person here pontificating about anything has been you. You, after all, are the one who claimed that the Catholic Church favors a laissez-faire economy. You are the one claiming that you don’t need no stinkin’ German Swiss thinkers (the Swiss thinkers are the important and most accessible ones, though Germans had something to say too) in order to learn something about economics. You’re the one who quite obvious doesn’t even know what this economic theory entails. I mean criminy (to borrow from tODD), have you even bothered to read the Wikipedia article on the subject?

    Ordoliberalism, to emphasize the other portion of the word, Porcell, is quite distinctly a brand of liberalism–like your hallowed laissez-faire brand of liberalism–that explicitly and soundly rejects any government intervention in the redistribution of wealth, the “nanny-state,” etc. Ordoliberalism is property credited with Germany’s postwar stability and its so-called “Wirtschaftwunder.” The only major aspect in which it differs from classical liberalism/Austrian school economics is that it views the government as having some very specific and limited but positive role in the economy rather than being of necessity an intrinsic and eternal evil, as libertarians in particular assert. There is no contradiction between ordoliberalism and some of the buzzwords you’ve spouted like “enterprise” and “freedom.” Germany’s recent stagnation and welfare state is the product of Keynesian and socialist principles, not ordo-liberal principles.

    You claim to have a better grasp of economics than these “fuzzy” ordoliberals–of which Hayek was one, actually, contrary to your claim. But aside from the fact that you’ve absurdly mischaracterized ordoliberalism, you haven’t actually articulated a coherent economic theory of your own in this thread. Instead, you’ve spent this entire discussion attacking an utterly ridiculous straw man you’ve constructed of ordoliberalism that bears absolutely no resemblance to the real thing. You’re kind of embarrassing yourself in that department. In order to mitigate your embarrassment here, Louis and I have provided a reading list. You might want to take a look.

  • Cincinnatus

    Porcell, I’m fairly certain the only person here pontificating about anything has been you. You, after all, are the one who claimed that the Catholic Church favors a laissez-faire economy. You are the one claiming that you don’t need no stinkin’ German Swiss thinkers (the Swiss thinkers are the important and most accessible ones, though Germans had something to say too) in order to learn something about economics. You’re the one who quite obvious doesn’t even know what this economic theory entails. I mean criminy (to borrow from tODD), have you even bothered to read the Wikipedia article on the subject?

    Ordoliberalism, to emphasize the other portion of the word, Porcell, is quite distinctly a brand of liberalism–like your hallowed laissez-faire brand of liberalism–that explicitly and soundly rejects any government intervention in the redistribution of wealth, the “nanny-state,” etc. Ordoliberalism is property credited with Germany’s postwar stability and its so-called “Wirtschaftwunder.” The only major aspect in which it differs from classical liberalism/Austrian school economics is that it views the government as having some very specific and limited but positive role in the economy rather than being of necessity an intrinsic and eternal evil, as libertarians in particular assert. There is no contradiction between ordoliberalism and some of the buzzwords you’ve spouted like “enterprise” and “freedom.” Germany’s recent stagnation and welfare state is the product of Keynesian and socialist principles, not ordo-liberal principles.

    You claim to have a better grasp of economics than these “fuzzy” ordoliberals–of which Hayek was one, actually, contrary to your claim. But aside from the fact that you’ve absurdly mischaracterized ordoliberalism, you haven’t actually articulated a coherent economic theory of your own in this thread. Instead, you’ve spent this entire discussion attacking an utterly ridiculous straw man you’ve constructed of ordoliberalism that bears absolutely no resemblance to the real thing. You’re kind of embarrassing yourself in that department. In order to mitigate your embarrassment here, Louis and I have provided a reading list. You might want to take a look.

  • Louis

    Porcell, ignoring historical facts, and current reality, because they do not fit in with your own ideology, is not a safe thing to do – just look at North Korea, Zimbabwe etc.

  • Louis

    Porcell, ignoring historical facts, and current reality, because they do not fit in with your own ideology, is not a safe thing to do – just look at North Korea, Zimbabwe etc.

  • Cincinnatus

    Hmph…I penned a rather long retort to Porcell, but I made the fatal mistake of inserting the word “soci@lism.” My comment now lingers in moderated limbo.

  • Cincinnatus

    Hmph…I penned a rather long retort to Porcell, but I made the fatal mistake of inserting the word “soci@lism.” My comment now lingers in moderated limbo.

  • Porcell

    Louis, the current reality in America is that a leftist administration through excessive regulation [ordo] and spending, along with a corrosive attitude toward the private economy has essentially stalled an economic recovery from a recession that, itself, was largely caused by government compelled lowering of home mortgage standards.

    Contrast this with Reagan, a devotee of Milton Friedman , who in the early eighties led the economy out of economic doldrums in the seventies. Obama’s ordoliberal tendency is proving quite detrimental to the economy.

  • Porcell

    Louis, the current reality in America is that a leftist administration through excessive regulation [ordo] and spending, along with a corrosive attitude toward the private economy has essentially stalled an economic recovery from a recession that, itself, was largely caused by government compelled lowering of home mortgage standards.

    Contrast this with Reagan, a devotee of Milton Friedman , who in the early eighties led the economy out of economic doldrums in the seventies. Obama’s ordoliberal tendency is proving quite detrimental to the economy.

  • Louis

    Obama is no ordoliberal. Regulation does not immediately mean ordoliberalism. Also, spending is not ordoliberlaism either. Or did you not read the articles.

    Part of Obama’s problem is that he, just as 95% of all US politicians, is beholden to special interest groups, big companies etc. Take the banking crisis for instance: The only G-8 country that did not suffer significantly from the banking crisis is Canada. The reason? The right type of regulation – regulation that stopped overt speculation and all that. Obama does not have the political courage / will to impose that.

    Unfortunately, you seem to think regulation bad, deregulation good. This is a very simplisitc view of reality, almost Palinesque. The dualistic view of politics and economics is common to the extremities of the politcal spectrum, and one would do well to think matter sthrough a bit more.

  • Louis

    Obama is no ordoliberal. Regulation does not immediately mean ordoliberalism. Also, spending is not ordoliberlaism either. Or did you not read the articles.

    Part of Obama’s problem is that he, just as 95% of all US politicians, is beholden to special interest groups, big companies etc. Take the banking crisis for instance: The only G-8 country that did not suffer significantly from the banking crisis is Canada. The reason? The right type of regulation – regulation that stopped overt speculation and all that. Obama does not have the political courage / will to impose that.

    Unfortunately, you seem to think regulation bad, deregulation good. This is a very simplisitc view of reality, almost Palinesque. The dualistic view of politics and economics is common to the extremities of the politcal spectrum, and one would do well to think matter sthrough a bit more.

  • Cincinnatus

    Porcell, I hope my comment comes out of moderation soon. In the meantime, your seemingly willful ignorance on this topic is infuriating. Please bother to learn what ordoliberalim is prior to constructing and imagined straw man of what you think it is and then attacking that ridiculous caricature of ordoliberalism that bears utterly no resemblance to the real thing. You’re embarrassing only yourself by such tactics.

    As for your latest atrocious comment, Obama is the farthest thing from an ordoliberal. He is nearly 100% Keynesian, an economic theory soundly rejected by ordoliberalism. Further, ordoliberalism has nothing to do with “excessive regulation.” The “excessive regulation and spending” of this Administration reflect devotion to classic Keynesianism.

    For your own sake, please refrain from pontificating upon a subject about which your knowledge consists entirely of self-concocted misinformation. It was embarrassing when you entirely mischaracterized the economic philosophy of the Catholic Church. Now it’s just silly because you’re making stuff up. That’s no way to go about a debate, son.

    In an ideal world of internet discourse (haha), you would have said something like the following, “I don’t know much about ordoliberalism, but according to the experts, it seems to have worked for Germany. I’ll defer to your knowledge of the subject because it’s obvious that you’ve done a lot of research and reading on the topic. Could you point me in the right direction so I could learn more about ordoliberalism? In the meantime, I’m rather partial to the Austrian school and I think it would work better in the American context because x, y, and z.”

    But no. Instead, you’ve argued this: “I haven’t the slightest clue what ordoliberalism is, but since it doesn’t seem to accord with every jot and tittle of my poorly-articulated prejudice toward Austrian school economics, I’m going to make up some totally wild definition for what I think (incorrectly) ordoliberalism should be and arbitrarily associate it with soci@lism and Keynesianism. I’ll proceed to argue based upon my totally imagined definition, which will somehow prove that my preferred economic theory is better. I will consciously avoid researching the topic myself.”

    Do you approach all topics like this? How do you learn anything?

  • Cincinnatus

    Porcell, I hope my comment comes out of moderation soon. In the meantime, your seemingly willful ignorance on this topic is infuriating. Please bother to learn what ordoliberalim is prior to constructing and imagined straw man of what you think it is and then attacking that ridiculous caricature of ordoliberalism that bears utterly no resemblance to the real thing. You’re embarrassing only yourself by such tactics.

    As for your latest atrocious comment, Obama is the farthest thing from an ordoliberal. He is nearly 100% Keynesian, an economic theory soundly rejected by ordoliberalism. Further, ordoliberalism has nothing to do with “excessive regulation.” The “excessive regulation and spending” of this Administration reflect devotion to classic Keynesianism.

    For your own sake, please refrain from pontificating upon a subject about which your knowledge consists entirely of self-concocted misinformation. It was embarrassing when you entirely mischaracterized the economic philosophy of the Catholic Church. Now it’s just silly because you’re making stuff up. That’s no way to go about a debate, son.

    In an ideal world of internet discourse (haha), you would have said something like the following, “I don’t know much about ordoliberalism, but according to the experts, it seems to have worked for Germany. I’ll defer to your knowledge of the subject because it’s obvious that you’ve done a lot of research and reading on the topic. Could you point me in the right direction so I could learn more about ordoliberalism? In the meantime, I’m rather partial to the Austrian school and I think it would work better in the American context because x, y, and z.”

    But no. Instead, you’ve argued this: “I haven’t the slightest clue what ordoliberalism is, but since it doesn’t seem to accord with every jot and tittle of my poorly-articulated prejudice toward Austrian school economics, I’m going to make up some totally wild definition for what I think (incorrectly) ordoliberalism should be and arbitrarily associate it with soci@lism and Keynesianism. I’ll proceed to argue based upon my totally imagined definition, which will somehow prove that my preferred economic theory is better. I will consciously avoid researching the topic myself.”

    Do you approach all topics like this? How do you learn anything?

  • Porcell

    Cincinnatus, I’m well aware of neo or ordoliberalism, having traveled often to Europe on invesstment banking business. A Czech Republic economist last Fall explained ordoliberalism to me as yet another futile attempt to find a third way between a free economy and soci@lism. I, followiing Adam Smith, have no problem with some minimal regulation of a free economy, though the truth is that most government attempts to sanitize capitalism shackle a free economy.

    I am a classic liberal, following the line from Smith through Hayek and Friedman. Along with Hayek in his Road to Serfdom, I am skeptical of any sort of government attempt to interfere with the economy, even to accomplish a more perfect form of capitalism, which is the osteensible purpose of ordoliberalism.

  • Porcell

    Cincinnatus, I’m well aware of neo or ordoliberalism, having traveled often to Europe on invesstment banking business. A Czech Republic economist last Fall explained ordoliberalism to me as yet another futile attempt to find a third way between a free economy and soci@lism. I, followiing Adam Smith, have no problem with some minimal regulation of a free economy, though the truth is that most government attempts to sanitize capitalism shackle a free economy.

    I am a classic liberal, following the line from Smith through Hayek and Friedman. Along with Hayek in his Road to Serfdom, I am skeptical of any sort of government attempt to interfere with the economy, even to accomplish a more perfect form of capitalism, which is the osteensible purpose of ordoliberalism.

  • http://www.toddstadler.com/ tODD

    Porcell said (@27), “I, followiing Adam Smith, have no problem with some minimal regulation of a free economy,” following it up two sentences later with, “I am skeptical of any sort of government attempt to interfere with the economy.”

    Yes, yes. Your position is clear: you don’t know what you think.

  • http://www.toddstadler.com/ tODD

    Porcell said (@27), “I, followiing Adam Smith, have no problem with some minimal regulation of a free economy,” following it up two sentences later with, “I am skeptical of any sort of government attempt to interfere with the economy.”

    Yes, yes. Your position is clear: you don’t know what you think.

  • Louis

    Porcell – there is a massive, massive difference between ordo- and neoliberalism. And as Todd points out, you make absolutely no sense. What do they teach them in these (Ivy league) schools?

  • Louis

    Porcell – there is a massive, massive difference between ordo- and neoliberalism. And as Todd points out, you make absolutely no sense. What do they teach them in these (Ivy league) schools?

  • Cincinnatus

    Don’t be silly, Louis: ordoliberalism, since it is neither neoliberalism nor soci@lism, is just a “futile attempt” at third way economics. If an unspecified Czech economist said it, it must be true.

  • Cincinnatus

    Don’t be silly, Louis: ordoliberalism, since it is neither neoliberalism nor soci@lism, is just a “futile attempt” at third way economics. If an unspecified Czech economist said it, it must be true.

  • Louis

    I stand corrected Cincinnatus, it seems that we must submit to the dictates of him who is so good that by mere typing on his computer, he can change the definitions of words, economies of countries and even history itself. Maybe we should move further discussions to the post on Superman vs Batman? There is a superhero amongst us….
    :) :) :)

  • Louis

    I stand corrected Cincinnatus, it seems that we must submit to the dictates of him who is so good that by mere typing on his computer, he can change the definitions of words, economies of countries and even history itself. Maybe we should move further discussions to the post on Superman vs Batman? There is a superhero amongst us….
    :) :) :)

  • Porcell

    Todd: “I, followiing Adam Smith, have no problem with some minimal regulation of a free economy,” .

    You conveniently left out, the part that finished the sentence, namely though the truth is that most government attempts to sanitize capitalism shackle a free economy.

    Todd: …following it up two sentences later with, “I am skeptical of any sort of government attempt to interfere with the economy.”

    Here . you cleverly left out the following sentence including: …even to accomplish a more perfect form of capitalism, which is the osteensible purpose of ordoliberalism. that referred to the ostensible purpode of ordoliberalism.

    The one point I agree with you on is your admittedly weak grasp of economic matters.

    Cincinnatus, rather than cynically dismissing the Czech economist, you might try answering his point, namely that ordoliberalism is yet another futile attempt to find a third way between soci@lism and capitalism.

  • Porcell

    Todd: “I, followiing Adam Smith, have no problem with some minimal regulation of a free economy,” .

    You conveniently left out, the part that finished the sentence, namely though the truth is that most government attempts to sanitize capitalism shackle a free economy.

    Todd: …following it up two sentences later with, “I am skeptical of any sort of government attempt to interfere with the economy.”

    Here . you cleverly left out the following sentence including: …even to accomplish a more perfect form of capitalism, which is the osteensible purpose of ordoliberalism. that referred to the ostensible purpode of ordoliberalism.

    The one point I agree with you on is your admittedly weak grasp of economic matters.

    Cincinnatus, rather than cynically dismissing the Czech economist, you might try answering his point, namely that ordoliberalism is yet another futile attempt to find a third way between soci@lism and capitalism.

  • Cincinnatus

    I will gladly answer your Czech economist’s point when he actually provides a point to answer. At the moment, all I have is a qualitatively biased, loaded statement that ordoliberalism is a version of “third way” economics (in general, correct), and that all versions of third way economic are apparently “futile.”

    All I can to that is something like “NO IT’S NOT!” or “I KNOW YOU ARE BUT WHAT AM I?” Why does he think it’s futile? Why is anything that is not pure capitalism or soci@lism automatically “futile”? Why must we continue speaking in these fruitless binaries (“anything that is not one of these two things need not be regarded”)? However intelligent your economist friend may be, it is difficult to frame a rational discussion upon what amounts to little more than a playground insult.

  • Cincinnatus

    I will gladly answer your Czech economist’s point when he actually provides a point to answer. At the moment, all I have is a qualitatively biased, loaded statement that ordoliberalism is a version of “third way” economics (in general, correct), and that all versions of third way economic are apparently “futile.”

    All I can to that is something like “NO IT’S NOT!” or “I KNOW YOU ARE BUT WHAT AM I?” Why does he think it’s futile? Why is anything that is not pure capitalism or soci@lism automatically “futile”? Why must we continue speaking in these fruitless binaries (“anything that is not one of these two things need not be regarded”)? However intelligent your economist friend may be, it is difficult to frame a rational discussion upon what amounts to little more than a playground insult.

  • Cincinnatus

    (kind of like how difficult it is to frame a discussion with someone who has no idea what he is talking about)

  • Cincinnatus

    (kind of like how difficult it is to frame a discussion with someone who has no idea what he is talking about)

  • Louis

    Porcell, jokes aside, you obviously have absolutely no clue what you are writing about: Another example of your ignorance (I’m not going to be polite anymore) is your equating ordoliberalism with neoliberalism (#27). I gave the definitions of ordoliberalism before.

    Neoliberalism, briefly is a market-drive approach to economic and social policy based on neoclassical theories of economics that maximise the role of the private business sector in determining the political and economic priorities of the state.

    It’s proponents include a wide range of people, such as:

    1. Thatcher (whose admiration for Hayek is well known) as well as those who came after her – there is that famous line by Peter Mandelson, associate of Blair, “We are all Thatcherites now”.

    2. Reagan’s Reagonomics are essentially neoliberal, and some argue that the US, following Reagan, was the biggest force for the advancement of Neoliberalism.

    3. Pinochet in Chile.

    4. Klein, Mulroney and Harris here in Canada – some say Harper too.

    Anyway, your very arguments indicate that you are in fact neoliberal in your understanding of economics, as is a large part of the Republican Party today. You have once again very clearly illustrated your appaling lack of knowledge. You have not responded, for instance, to our clear demonstration that your equating of JP II with Austrian School economics was as false as they come.

    One can only surmise that you are uninterested in honest discussion. I, and I think most others here do not mind opposing viewpoints. Debate is fun and educational, and I have changed my mind because of debates before. You, however, appear not to understand these things. You are arrogant and ignorant, a very lethal combination. I will try and limit my interaction with you here, as it serves no purpose, other than elevating the blood pressure.

  • Louis

    Porcell, jokes aside, you obviously have absolutely no clue what you are writing about: Another example of your ignorance (I’m not going to be polite anymore) is your equating ordoliberalism with neoliberalism (#27). I gave the definitions of ordoliberalism before.

    Neoliberalism, briefly is a market-drive approach to economic and social policy based on neoclassical theories of economics that maximise the role of the private business sector in determining the political and economic priorities of the state.

    It’s proponents include a wide range of people, such as:

    1. Thatcher (whose admiration for Hayek is well known) as well as those who came after her – there is that famous line by Peter Mandelson, associate of Blair, “We are all Thatcherites now”.

    2. Reagan’s Reagonomics are essentially neoliberal, and some argue that the US, following Reagan, was the biggest force for the advancement of Neoliberalism.

    3. Pinochet in Chile.

    4. Klein, Mulroney and Harris here in Canada – some say Harper too.

    Anyway, your very arguments indicate that you are in fact neoliberal in your understanding of economics, as is a large part of the Republican Party today. You have once again very clearly illustrated your appaling lack of knowledge. You have not responded, for instance, to our clear demonstration that your equating of JP II with Austrian School economics was as false as they come.

    One can only surmise that you are uninterested in honest discussion. I, and I think most others here do not mind opposing viewpoints. Debate is fun and educational, and I have changed my mind because of debates before. You, however, appear not to understand these things. You are arrogant and ignorant, a very lethal combination. I will try and limit my interaction with you here, as it serves no purpose, other than elevating the blood pressure.

  • Porcell

    Louis: Neoliberalism, briefly is a market-drive[n] approach to economic and social policy based on neoclassical theories of economics that maximise the role of the private business sector in determining the political and economic priorities of the state.

    The problem with this argument is that the state determines the economic priorities as opposed to the market, thus violating the premise of classical liberalism. Essentially, it’s a back-door return to the state as the mercantile ruler of economic policy. The rhetoric is about the market, though the reality is that the state rules the economy, something that Smith, Mises, Hayek, Friedman, et al would strenuously object to. In a free economy the market rules, notwithstanding any pretense that government somehow can figure out a better or wiser way.

    For all their faults, capitalists and businessman on the ground ,with serious investments at stake are far more able to determine economic priorities.

  • Porcell

    Louis: Neoliberalism, briefly is a market-drive[n] approach to economic and social policy based on neoclassical theories of economics that maximise the role of the private business sector in determining the political and economic priorities of the state.

    The problem with this argument is that the state determines the economic priorities as opposed to the market, thus violating the premise of classical liberalism. Essentially, it’s a back-door return to the state as the mercantile ruler of economic policy. The rhetoric is about the market, though the reality is that the state rules the economy, something that Smith, Mises, Hayek, Friedman, et al would strenuously object to. In a free economy the market rules, notwithstanding any pretense that government somehow can figure out a better or wiser way.

    For all their faults, capitalists and businessman on the ground ,with serious investments at stake are far more able to determine economic priorities.

  • Cincinnatus

    Wait, so now you don’t understand neo-liberalism either?

  • Cincinnatus

    Wait, so now you don’t understand neo-liberalism either?

  • Louis

    For all others: Two quotes to underscore our arguments here:

    First, Samuel Brittan in :“Brittan, Samuel “Hayek, Friedrich August (1899–1992)”, Oxford Dictionary of National Biography, (2006)

    Hayek’s book [The Constitution of Liberty] is still probably the most comprehensive statement of the underlying ideas of the moderate free market philosophy espoused by neoliberals

    Then, Stephanie Lee Mudge in the Socio-Economic Review 2008 6(4):703-731, “What is neo-liberalism? – this one also refers to the difference between neo- and ordoliberalism.
    Adding a historical basis to Campbell and Pedersen’s definition, neo-liberalism is defined here as an ideological system that holds the ‘market’ sacred, born within the ‘human’ or social sciences and refined in a network of Anglo-American-centric knowledge producers, expressed in different ways within the institutions of the postwar nation-state and their political fields (Bourdieu, 1992, 1994, 2005; Bourdieu and Wacquant, 1992). Neo-liberalism is rooted in a moral project, articulated in the language of economics, that praises ‘the moral benefits of market society’ and identifies ‘markets as a necessary condition for freedom in other aspects of life’ (Fourcade and Healy, 2007, p. 287). This conception of neo-liberalism fits squarely with Durkheimian perspectives that treat market-making as a process by which ‘moral categories’—that is, the sacred and the profane—‘are formed, contested, and transformed’ (Fourcade and Healy, 2007, p. 301).4 As Durkheim (2001[1912]) argued, it is precisely because of an ‘essentially religious faith’ in science that its concepts—in this case, the notion of a free-standing, apolitical, machine-like ‘market’—exert moral force (2001[1912], pp. 208, 439).

    and

    Neo-liberalism is distinctive with respect to other liberalisms in its drive to break the ‘market’ loose in conceptual terms and elevate it to a level above politics—that is, to free it from political interventions of any kind. Its rejection of the market’s embeddedness contrasts in particular with Continental ordo-liberalism (Friedrich, 1955), which was probably the site of the first self-proclaimed ‘neo-liberals’, not to mention the first articulations of a ‘third way’ between totalitarianism and laissez faire. Significantly, ordo-liberalism was a historicist school of thought in which Hayek was originally rooted before breaking off on a more starkly laissez faire trajectory.
    Ordo-liberals viewed economic dynamics as ‘”embedded” in politics’ (Friedrich, 1955, p. 511). Wilhelm Röpke, one of the school’s central figures, emphatically rejected the notion that the market is ‘a self dependent process whirring away automatically’ (Röpke 1996[1948], pp. 31–32). Though opposed to central planning (subvention), ordo-liberals believed that government interventions were economic necessities:

  • Louis

    For all others: Two quotes to underscore our arguments here:

    First, Samuel Brittan in :“Brittan, Samuel “Hayek, Friedrich August (1899–1992)”, Oxford Dictionary of National Biography, (2006)

    Hayek’s book [The Constitution of Liberty] is still probably the most comprehensive statement of the underlying ideas of the moderate free market philosophy espoused by neoliberals

    Then, Stephanie Lee Mudge in the Socio-Economic Review 2008 6(4):703-731, “What is neo-liberalism? – this one also refers to the difference between neo- and ordoliberalism.
    Adding a historical basis to Campbell and Pedersen’s definition, neo-liberalism is defined here as an ideological system that holds the ‘market’ sacred, born within the ‘human’ or social sciences and refined in a network of Anglo-American-centric knowledge producers, expressed in different ways within the institutions of the postwar nation-state and their political fields (Bourdieu, 1992, 1994, 2005; Bourdieu and Wacquant, 1992). Neo-liberalism is rooted in a moral project, articulated in the language of economics, that praises ‘the moral benefits of market society’ and identifies ‘markets as a necessary condition for freedom in other aspects of life’ (Fourcade and Healy, 2007, p. 287). This conception of neo-liberalism fits squarely with Durkheimian perspectives that treat market-making as a process by which ‘moral categories’—that is, the sacred and the profane—‘are formed, contested, and transformed’ (Fourcade and Healy, 2007, p. 301).4 As Durkheim (2001[1912]) argued, it is precisely because of an ‘essentially religious faith’ in science that its concepts—in this case, the notion of a free-standing, apolitical, machine-like ‘market’—exert moral force (2001[1912], pp. 208, 439).

    and

    Neo-liberalism is distinctive with respect to other liberalisms in its drive to break the ‘market’ loose in conceptual terms and elevate it to a level above politics—that is, to free it from political interventions of any kind. Its rejection of the market’s embeddedness contrasts in particular with Continental ordo-liberalism (Friedrich, 1955), which was probably the site of the first self-proclaimed ‘neo-liberals’, not to mention the first articulations of a ‘third way’ between totalitarianism and laissez faire. Significantly, ordo-liberalism was a historicist school of thought in which Hayek was originally rooted before breaking off on a more starkly laissez faire trajectory.
    Ordo-liberals viewed economic dynamics as ‘”embedded” in politics’ (Friedrich, 1955, p. 511). Wilhelm Röpke, one of the school’s central figures, emphatically rejected the notion that the market is ‘a self dependent process whirring away automatically’ (Röpke 1996[1948], pp. 31–32). Though opposed to central planning (subvention), ordo-liberals believed that government interventions were economic necessities:

  • Porcell

    Significantly, ordo-liberalism was a historicist school of thought in which Hayek was originally rooted before breaking off on a more starkly laissez faire trajectory.

    Exactly, sensible economists in the long run return to Adam Smith.

  • Porcell

    Significantly, ordo-liberalism was a historicist school of thought in which Hayek was originally rooted before breaking off on a more starkly laissez faire trajectory.

    Exactly, sensible economists in the long run return to Adam Smith.

  • Louis

    “Ahhh”, he sighs, reaching for the bottle of restorative, “I need you today, my old friend”.

  • Louis

    “Ahhh”, he sighs, reaching for the bottle of restorative, “I need you today, my old friend”.

  • Porcell

    Lo, your opacity is exceeded only by your lack of economic sophistication.

  • Porcell

    Lo, your opacity is exceeded only by your lack of economic sophistication.

  • Cincinnatus

    Porcell, your accusing someone of a lack of “economic sophistication” is perhaps the most ironic thing I’ve heard all week. If it is a joke, it is a good one. If it is not, it is truly cringe-worthy. This from the person who called the Catholic Church an advocate of laissez-faire economics, who is obviously not apprised of the tenets of ordo-liberalism, who does not even know what neo-liberalism (in European parlance is), who does not recognize Keynesian economics on sight!

    I’m willing to forgive economic ignorance; most American voters and politicians are guilty of the same, and its a technical subject not suited for everyone. tODD is good enough to refrain from pontification on a subject about which he professes to know little. There is nothing wrong with that. But it’s difficult to forgive such ignorance if the single most economically illiterate person in the thread saunters in and proclaims the ascendancy of his economic sophistication–a ridiculous claim to all eyes! Meanwhile, you profess that you don’t even need to read any “fuzzy Germans” to learn anything, not even bothering to apprise yourself of the meaning of the most basic terms we’ve employed. Not only is your knowledge of our topic sparse, but you refuse to improve this circumstance! But yet you insist upon joining the discussion instead, deeming your playground insults to be a sign of a “sophistication” which we most surely lack.

    Since having an economic debate with you is like talking to a brick wall, let’s change the subject. Might I ask why you have changed your handle to “Porcell”? I’m unfamiliar with the word, and I wonder if it has any significance.

  • Cincinnatus

    Porcell, your accusing someone of a lack of “economic sophistication” is perhaps the most ironic thing I’ve heard all week. If it is a joke, it is a good one. If it is not, it is truly cringe-worthy. This from the person who called the Catholic Church an advocate of laissez-faire economics, who is obviously not apprised of the tenets of ordo-liberalism, who does not even know what neo-liberalism (in European parlance is), who does not recognize Keynesian economics on sight!

    I’m willing to forgive economic ignorance; most American voters and politicians are guilty of the same, and its a technical subject not suited for everyone. tODD is good enough to refrain from pontification on a subject about which he professes to know little. There is nothing wrong with that. But it’s difficult to forgive such ignorance if the single most economically illiterate person in the thread saunters in and proclaims the ascendancy of his economic sophistication–a ridiculous claim to all eyes! Meanwhile, you profess that you don’t even need to read any “fuzzy Germans” to learn anything, not even bothering to apprise yourself of the meaning of the most basic terms we’ve employed. Not only is your knowledge of our topic sparse, but you refuse to improve this circumstance! But yet you insist upon joining the discussion instead, deeming your playground insults to be a sign of a “sophistication” which we most surely lack.

    Since having an economic debate with you is like talking to a brick wall, let’s change the subject. Might I ask why you have changed your handle to “Porcell”? I’m unfamiliar with the word, and I wonder if it has any significance.

  • Porcell

    Cincinnatus, you might really read Centesimus Annus on the subject of the Catholic Church and the virtue of a free economy including the following from an Acton Institute Religion and Liberty discussion Centesimus Annus in Retrospective:

    Weigel: Centesimus Annus is, with Leo XIII’s Rerum Novarum (1891) and Pius XI’s Quadragesimo Anno (1931), one of the three great texts of modern Catholic social teaching. But Centesimus Annus did more than recapitulate the teaching of John Paul II’s predecessors; it also set the social doctrine of the Church on a new path by its endorsement of the free economy, its empirical sensitivity on questions of economic development, and its insistence that a vibrant, publicly assertive moral-cultural order is essential to the functioning of the free economy and the democratic political community. Catholics, and indeed everyone interested in the relationship between moral truth and the free society, will be wrestling with Centesimus Annus for at least a century.

    Easy assumptions about Catholic social teaching usually are fraught with error. Weigel is quite right that the complexity and subtlety of JP II’s encyclical will be wrestled with for a long time. John Paul II; having experienced the pleasures of both Hitler and Stalin, had great respect for the virtue of a free economy within the context of a rule of moral and civil law.

    As to m new moniker, it has something to do with a society to which I belonged at college.

  • Porcell

    Cincinnatus, you might really read Centesimus Annus on the subject of the Catholic Church and the virtue of a free economy including the following from an Acton Institute Religion and Liberty discussion Centesimus Annus in Retrospective:

    Weigel: Centesimus Annus is, with Leo XIII’s Rerum Novarum (1891) and Pius XI’s Quadragesimo Anno (1931), one of the three great texts of modern Catholic social teaching. But Centesimus Annus did more than recapitulate the teaching of John Paul II’s predecessors; it also set the social doctrine of the Church on a new path by its endorsement of the free economy, its empirical sensitivity on questions of economic development, and its insistence that a vibrant, publicly assertive moral-cultural order is essential to the functioning of the free economy and the democratic political community. Catholics, and indeed everyone interested in the relationship between moral truth and the free society, will be wrestling with Centesimus Annus for at least a century.

    Easy assumptions about Catholic social teaching usually are fraught with error. Weigel is quite right that the complexity and subtlety of JP II’s encyclical will be wrestled with for a long time. John Paul II; having experienced the pleasures of both Hitler and Stalin, had great respect for the virtue of a free economy within the context of a rule of moral and civil law.

    As to m new moniker, it has something to do with a society to which I belonged at college.

  • Porcell

    Pardon me, the Acton Institute Religion and Liberty link is Here.

  • Porcell

    Pardon me, the Acton Institute Religion and Liberty link is Here.

  • Cincinnatus

    Yup, good jorb, there, Porcell. The Catholic Church endorses a market economy rather than an authoritarian command economy. I mentioned this above. The Catholic Church also officially advocates a just wage, a social welfare safety net, a viable and important role for labor unions, progressive taxation,”fair” trade, and various permutations of distributism (another “futile” third way theory). I don’t agree with all of these things, but once again, it is patently false to call the Catholic Church a bastion of Austrian economics.

  • Cincinnatus

    Yup, good jorb, there, Porcell. The Catholic Church endorses a market economy rather than an authoritarian command economy. I mentioned this above. The Catholic Church also officially advocates a just wage, a social welfare safety net, a viable and important role for labor unions, progressive taxation,”fair” trade, and various permutations of distributism (another “futile” third way theory). I don’t agree with all of these things, but once again, it is patently false to call the Catholic Church a bastion of Austrian economics.

  • Porcell

    Cincinnatus, I should suggest that you read Hayek closely, particularly his longer one Constitution of Liberty which in spirit and actuality is rather close to Cenntisimus Annus. The simple notion that Mises and Hayek favored a strict laissez faire economy is mistaken, though neither would have fallen for the error of neo or ordo liberalism that attempts to smuggle the state back into economic rule.

  • Porcell

    Cincinnatus, I should suggest that you read Hayek closely, particularly his longer one Constitution of Liberty which in spirit and actuality is rather close to Cenntisimus Annus. The simple notion that Mises and Hayek favored a strict laissez faire economy is mistaken, though neither would have fallen for the error of neo or ordo liberalism that attempts to smuggle the state back into economic rule.

  • http://www.toddstadler.com/ tODD

    (Cincinnatus, Porcell is too modest to tell you, but he was a member of the Porcellian Club in his time at Harvard. In keeping with this modesty, I’m alerting you in parentheses.)

  • http://www.toddstadler.com/ tODD

    (Cincinnatus, Porcell is too modest to tell you, but he was a member of the Porcellian Club in his time at Harvard. In keeping with this modesty, I’m alerting you in parentheses.)

  • http://www.toddstadler.com/ tODD

    Which is a pity, as I was hoping — in vain, it seems — that Peter was actually a fan of John ‘Porcell’ Porcelly (a.k.a Parmananda Das), guitarist for 80s hardcore bands Young Republicans, Violent Children, Youth Of Today, and Judge. Another dream dies.

  • http://www.toddstadler.com/ tODD

    Which is a pity, as I was hoping — in vain, it seems — that Peter was actually a fan of John ‘Porcell’ Porcelly (a.k.a Parmananda Das), guitarist for 80s hardcore bands Young Republicans, Violent Children, Youth Of Today, and Judge. Another dream dies.

  • Cincinnatus

    Let’s not discuss ordo-liberalism any longer, since you don’t know what it is. I’ve read Hayek, and while I do not agree with all he wrote, The Road to Serfdom is a great work. Ropke is superior, though.

    As for the Cenntisimus Annus, I once again acknowledge that the Catholic Church recognizes the value of a free market. But the free market is not the only economic tenet the Church values, nor does the CA in isolation represent the totality of the Church’s economic philosophy. If the Church’s economic position can be summarized at all, it resembles something like this: http://en.wikipedia.org/wiki/Distributism Feel free to disagree, as I do, with some or all of its aspects, but don’t persist in the ridiculous effort to enlist the Roman Catholic Church in your capitalist crusade. As ideological think tanks are wont to do, it is no surprise that the market-oriented Acton Institute has seized upon a decontextualized publication of the Church and, because parts of it happen to correspond with something Hayek said, use it to proclaim that, “See, The Pope is on our side! We must be right!” They may be right, but the Pope isn’t exactly on their side. You should be better and more intellectually honest than that. Part of your obstinate ire may be rooted in the fact that you assume I am hostile to the free market. I am not. My only point here is that the Catholic Church cannot be sincerely counted amongst the ranks of the laissez-faire free-marketeers. Honestly. It can’t.

    Pet peeve: That word neoliberalism–I do not think it means what you think it means. Louis (and I) are employing the European usage of the term. In that parlance, it simply signifies neoclassical, free market economics as articulated by Ludwig von Mises and Hayek. If you are repudiating neoliberalism, you are apparently repudiating yourself.

  • Cincinnatus

    Let’s not discuss ordo-liberalism any longer, since you don’t know what it is. I’ve read Hayek, and while I do not agree with all he wrote, The Road to Serfdom is a great work. Ropke is superior, though.

    As for the Cenntisimus Annus, I once again acknowledge that the Catholic Church recognizes the value of a free market. But the free market is not the only economic tenet the Church values, nor does the CA in isolation represent the totality of the Church’s economic philosophy. If the Church’s economic position can be summarized at all, it resembles something like this: http://en.wikipedia.org/wiki/Distributism Feel free to disagree, as I do, with some or all of its aspects, but don’t persist in the ridiculous effort to enlist the Roman Catholic Church in your capitalist crusade. As ideological think tanks are wont to do, it is no surprise that the market-oriented Acton Institute has seized upon a decontextualized publication of the Church and, because parts of it happen to correspond with something Hayek said, use it to proclaim that, “See, The Pope is on our side! We must be right!” They may be right, but the Pope isn’t exactly on their side. You should be better and more intellectually honest than that. Part of your obstinate ire may be rooted in the fact that you assume I am hostile to the free market. I am not. My only point here is that the Catholic Church cannot be sincerely counted amongst the ranks of the laissez-faire free-marketeers. Honestly. It can’t.

    Pet peeve: That word neoliberalism–I do not think it means what you think it means. Louis (and I) are employing the European usage of the term. In that parlance, it simply signifies neoclassical, free market economics as articulated by Ludwig von Mises and Hayek. If you are repudiating neoliberalism, you are apparently repudiating yourself.

  • Louis

    Cincinnatus – brickwall is the word you are looking far. In Porcell’s mind, definitions are twisted to serve him and no other – he never acknowledges any error (like equating neo and ordoliberalism) and he cannot see that he is reading things into whatever he’s reading to fit his own preconceptions. It is no use pointing out him, step-by-step, why he is wrong, even quoting his own words. Todd tried that in the past, and failed to get through to him. Once he has formed an opinion on a matter, neither argument, not proof will change his mind. You waste your energy interacting with the man.

    BTW – porcell could mean one of four things:

    It is a know surname, albeit rare. It is the stage name / nickname of an obscure 80′s rocker. It is the Catalan word for piglet (from Latin, porcellus). And it is a name given to the Triggerfish. I’m not aware of any other meanings.

  • Louis

    Cincinnatus – brickwall is the word you are looking far. In Porcell’s mind, definitions are twisted to serve him and no other – he never acknowledges any error (like equating neo and ordoliberalism) and he cannot see that he is reading things into whatever he’s reading to fit his own preconceptions. It is no use pointing out him, step-by-step, why he is wrong, even quoting his own words. Todd tried that in the past, and failed to get through to him. Once he has formed an opinion on a matter, neither argument, not proof will change his mind. You waste your energy interacting with the man.

    BTW – porcell could mean one of four things:

    It is a know surname, albeit rare. It is the stage name / nickname of an obscure 80′s rocker. It is the Catalan word for piglet (from Latin, porcellus). And it is a name given to the Triggerfish. I’m not aware of any other meanings.

  • Louis

    I see I cross posted again……

  • Louis

    I see I cross posted again……

  • Porcell

    Cincinnatus, the Acton Institute was founded to express Lord Acton’s views of liberty within the context of the Roman Catholic faith. In many ways Acton was and is a prophetic figure who understood the virtue of Christian liberty including in the economic sphere. Referring to him and the Acton Institute in terms of crass ideology would rather be a form of ignorance.

  • Porcell

    Cincinnatus, the Acton Institute was founded to express Lord Acton’s views of liberty within the context of the Roman Catholic faith. In many ways Acton was and is a prophetic figure who understood the virtue of Christian liberty including in the economic sphere. Referring to him and the Acton Institute in terms of crass ideology would rather be a form of ignorance.

  • Cincinnatus

    Peter, stop preaching: I’m familiar with the Acton Institute, reading it for both pleasure and profit (I had to keep up with its posts as part of a previous job).

    But in case I haven’t convinced you that the Catholic Church is a staunch critic of capitalism and the unmitigated market, please read this:

    http://www.ratzingerfanclub.com/blog/2007/09/pope-benedicts-critique-of-capitalism.html

    While the Church recognizes the indispensability of voluntary exchange in any flourishing economy, that recognition is very much tempered by other priorities, amongst which is a “strong juridical framework.” Catholics are much more trusting of government, and, following Aquinas, much more sanguine as to its potential than are Hayek, Mises, you, and probably I.

  • Cincinnatus

    Peter, stop preaching: I’m familiar with the Acton Institute, reading it for both pleasure and profit (I had to keep up with its posts as part of a previous job).

    But in case I haven’t convinced you that the Catholic Church is a staunch critic of capitalism and the unmitigated market, please read this:

    http://www.ratzingerfanclub.com/blog/2007/09/pope-benedicts-critique-of-capitalism.html

    While the Church recognizes the indispensability of voluntary exchange in any flourishing economy, that recognition is very much tempered by other priorities, amongst which is a “strong juridical framework.” Catholics are much more trusting of government, and, following Aquinas, much more sanguine as to its potential than are Hayek, Mises, you, and probably I.

  • Cincinnatus

    *So why do you keep insisting upon Catholicism’s alleged free-market advocacy? What do you have to lose if the Church doesn’t agree with you? Last I checked, you weren’t Catholic, so it shouldn’t really matter what the Church promulgates as its economic philosophy, should it?

    None of that is to say that the Church does not have very significant and very instructive things to say about economics, but, amongst other things about which I am baffled (such as your unwillingness to research ordoliberalism before condemning it), I cannot understand why it is problematic for you to accept that you believe one thing about economics, and the Catholic Church believes another thing. That’s how it is. The fact that the Church favors distributism while you favor neoclassical economics says little to nothing about the validity of the latter.

  • Cincinnatus

    *So why do you keep insisting upon Catholicism’s alleged free-market advocacy? What do you have to lose if the Church doesn’t agree with you? Last I checked, you weren’t Catholic, so it shouldn’t really matter what the Church promulgates as its economic philosophy, should it?

    None of that is to say that the Church does not have very significant and very instructive things to say about economics, but, amongst other things about which I am baffled (such as your unwillingness to research ordoliberalism before condemning it), I cannot understand why it is problematic for you to accept that you believe one thing about economics, and the Catholic Church believes another thing. That’s how it is. The fact that the Church favors distributism while you favor neoclassical economics says little to nothing about the validity of the latter.

  • Porcell

    Cincinnatus: As ideological think tanks are wont to do, it is no surprise that the market-oriented Acton Institute has seized upon a decontextualized publication of the Church and, because parts of it happen to correspond with something Hayek said, use it to proclaim that, “See, The Pope is on our side! We must be right!” They may be right, but the Pope isn’t exactly on their side.

    You claim to have found “pleasure and profit” from the Acton Institute, though you crudely label it an “ideological think-tank.”
    Which is it? The truth is that you talk a good game based largely on Wiki sources, though, like Louis, you, really don’t know what you are talking about. No serious man of business takes such trifles as “ordo-liberalism” with any seriousness, as it is a fuzzy notion that somehow government can rule the economy based on a presumption that it can improve and make more honest a market economy. Our idiot president just now makes a similar presumption.

  • Porcell

    Cincinnatus: As ideological think tanks are wont to do, it is no surprise that the market-oriented Acton Institute has seized upon a decontextualized publication of the Church and, because parts of it happen to correspond with something Hayek said, use it to proclaim that, “See, The Pope is on our side! We must be right!” They may be right, but the Pope isn’t exactly on their side.

    You claim to have found “pleasure and profit” from the Acton Institute, though you crudely label it an “ideological think-tank.”
    Which is it? The truth is that you talk a good game based largely on Wiki sources, though, like Louis, you, really don’t know what you are talking about. No serious man of business takes such trifles as “ordo-liberalism” with any seriousness, as it is a fuzzy notion that somehow government can rule the economy based on a presumption that it can improve and make more honest a market economy. Our idiot president just now makes a similar presumption.

  • Cincinnatus

    Peter, essentially all think tanks are ideologically aligned. The Acton Institute’s economics department is obviously predisposed to favor market-oriented approaches. The Heritage Institute is ideological. So are the Cato Institute, the Hoover Institution, the Brookings Institution, the AEI, and essentially any other “institute” that publishes thoughtful opinion pieces. It doesn’t mean they aren’t worth reading. I wasn’t necessarily insulting the Acton Institute when I assigned it an “ideological” label. It is what it is.

    Meanwhile, you can’t simultaneously idolize the Church’s economic philosophy while disparaging any economic theory that reserves a prominent place for the government in its mechanisms. As I demonstrated, the Catholic Church is very open to governmental participation in the economic framework, so we have a word for your conflicting positions: cognitive dissonance.

    And you still don’t have a coherent conception of “ordoliberalism.”

  • Cincinnatus

    Peter, essentially all think tanks are ideologically aligned. The Acton Institute’s economics department is obviously predisposed to favor market-oriented approaches. The Heritage Institute is ideological. So are the Cato Institute, the Hoover Institution, the Brookings Institution, the AEI, and essentially any other “institute” that publishes thoughtful opinion pieces. It doesn’t mean they aren’t worth reading. I wasn’t necessarily insulting the Acton Institute when I assigned it an “ideological” label. It is what it is.

    Meanwhile, you can’t simultaneously idolize the Church’s economic philosophy while disparaging any economic theory that reserves a prominent place for the government in its mechanisms. As I demonstrated, the Catholic Church is very open to governmental participation in the economic framework, so we have a word for your conflicting positions: cognitive dissonance.

    And you still don’t have a coherent conception of “ordoliberalism.”

  • Cincinnatus

    Oh, and while I know “serious men of business” don’t have time for book larnin’ and researching topics before they pontificate upon them, I’ve only referenced Wikipedia a single time, and that only to provide a brief summary of distributism, which, due to your knowledge (or lack thereof) regarding ordoliberalism, neoliberalism, and the Catholic Church, I assumed–perhaps incorrectly–would be an unfamiliar term to you.

  • Cincinnatus

    Oh, and while I know “serious men of business” don’t have time for book larnin’ and researching topics before they pontificate upon them, I’ve only referenced Wikipedia a single time, and that only to provide a brief summary of distributism, which, due to your knowledge (or lack thereof) regarding ordoliberalism, neoliberalism, and the Catholic Church, I assumed–perhaps incorrectly–would be an unfamiliar term to you.


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