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Neo-Liberalism vs Ordo-Liberalism
“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.
Ordoliberals arrived at a conclusion that the market structure is no longer suitable for perfect competition. Individual political freedom was to be safeguarded by ensuring a liberal market order. Ordoliberalism has dominated German thinking about the market since World War II. In the 2001 Census Bureau on household income in the US, despite an unprecedented 10-year economic expansion, income inequality was at a post-World War II high. - Second, the state retains a strong role in protecting the basic factors of thecompetition system but with strict limits on more direct intervention, as in pricing. Thus the state has a role to play in regulating the market. Freedom of markets has to be complemented by rules and institutions, i. 9 percent of all income, well above the 17. He stated that for capitalism to grow, full employment must be achieved. The resulting low labor costs increased profits, enabling owners to award the "super CEO salaries" for which the 80s became notorious. hallenged liberalism as the best policy for capitalism. 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. 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.
