What is Ordoliberalism in Economics?

  • An economic ideology that views the the state as an institution that offers an appropriate legal framework for the efficient functioning of the market economy.
  • It emphasises that the state has a crucial role to play in fostering market competition, by preventing the rise of monopolies that can exert harmful economic and political power.
  • At the same time, the state must also avoid distorting the free market.
  • Ordoliberal principles, famously adopted by former German Chancellor Ludwig Erhard, played a major role in the miraculous rise of the German economy in the post-Second World War era.

Leave a Reply