Neoliberalism vs. Ordoliberalism

Length: 7 Pages 1690 Words

“My notion of democracy is that under it the weakest should have the same opportunity as the strongest.”- Mahatma Gandhi. In this paper, I will show the differences between two types of liberal thought, Neoliberalism and Ordoliberalism, that have attempted to achieve Gandhi’s notion. Merriam-Webster defines Neo-liberalism as “a liberal who de-emphasizes traditional liberal doctrines in order to seek progress by more pragmatic methods.” Liberalism can refer to any social, economic, or even religious idea, whereas “neo” refers to a new form of an idea. The first type of liberalism gained recognition in Europe in 1776 by Adam Smith when he published his classic novel, The Wealth of Nations. Smith, along with others, advocated for the abolition of government intervention in economic matters. These included no restrictions on manufacturing, no barriers to commerce, no tariffs, but instead free trade and open competition. These economic ideas were considered “liberal” since no controls and individualism was encouraged. This however, only led to capitalists making huge profits. Until the Great Depression in 1929, economic liberalism prevailed in the United States. Using the Great Depression as his stepping-stone, Joh Continue...

Deregulation not only funneled wealth upward, but also put the consumer and the worker in harm's way. Katzenstein wrote in Policy and Politics in West Germany that "Numerous institutions--corporate bodies, foundations, institutes--are organized under public law and carry out important policy functions. The belief that government should intercede became widely accepted as President"tms Roosevelt"tms New Deal improved the quality of life for many. The first observation was that unhampered market competition and the monetary system create instability. -Freezing the minimum wage, which allows inflation to effect a wage cut over time. Neo-liberalism can be challenged and replaced because its own failures will require this. Ordoliberals provide four key characteristics to their conception of competition, which is central to the market economy. The banking community, one of the richest segments of our society, collects interest on private, corporate and national debt, all of which reached record levels during the 80s. What makes the theory of Ordoliberalism stand out is its attempt to theorize the link between the economic order and individual liberty. This constitution would ensure fair distribution and minimize governmental intervention while still providing protection over individual freedom from private economic powers. As a result, an economic system cannot emerge spontaneously. mediated by the self-government of many social sectors.