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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.

http://www.opendemocracy.net/ourkingdom/mike-rustin/after-neo-liberalism-in-britain

The "success" of Thatcherism and Reaganism was only possible because of the possibility of revived economic growth based on new and increased oil supply for the U.S. and U.K.  Now, following decline of nearly all fossil fuel energy sources, and the need to import more and more of them, we face vastly increasing wealth transfers to energy-rich countries.  This is what proved to be the tipping point for the 2008 financial crisis, as home owners could no longer afford food, energy, and mortgage payments combined - thus starting a chain of events that exposed silly and illegal financial sector manipulations to public scrutiny.  

Now, following peaking of world oil supplies, world-wide economic growth (as well as growth in westernized economies), which for the last century has always correlated strongly with oil supply, will be negative for the remainder of this century.  This could play out as a fight over ever- diminishing food supplies, since the world food production system is at least 90% dependent on oil and natural gas.  I expect the resulting economic decline to result in constantly changing political election results as populations flail around trying to find someone who can lead us out of this trap - to no avail.  

For individuals, probably the only way to cope will be to engage in something like the Transition Initiatives begun in the British Isles, and copied now in parts of the U.S.  The focus of these TIs is relocalization of all of life's necessities, as well as localized economic systems and currency.

http://www.globalissues.org/article/39/a-primer-on-neoliberalism#FreeMarketsWereNotNaturalTheyWereEnforced