1. A policy debate regarding the “best mode of operating an economy”
Neo-liberal theory can be traced back to two key component schools of thought,
first being the Ordo-liberalism found in West Germany, the second being the later
developed ideas found in the Chicago school. The origins of Ordo-liberalism can
be found in the theoretical ideas that were previously developed by jurists and
economists belonging to the Freiburg School (Vanberg, 2004). This Freiburg
School can be seen as the first small intellectual collective that pursued Neoliberal
agendas.
Weber had previously taken Marx’s problem of the ‘contradictory logic of
capitalism’ to a plane of discussion in which it became seen as the ‘irrational
rationality of capitalist society’ (Weber, 1930). Whilst many scholars and
academics searched for a ‘social rationality’ that would overcome this problem
inherent in capitalism, the Freiburg school did not. Instead it endeavored to
redefine the economic (capitalist) rationality in order to prevent the social
irrationality of capitalism from unfolding (Lemke, 2001). Although most political
debates were poised as socialism versus capitalism, the Freiburg school viewed
the debate as being liberalism on one side and the various forms of state
intervention on the other, including Soviet Socialism, National Socialism, and
Keynesian models. (Burchell, 1993). The Freiburg school blamed the absence of
Joseph Noott Ideological Wars Dr Demetris Tillyris
liberalism for the rise of fascism and socialism. Saying the Nazi Third Reich came
about due to a series of anti-liberal policies by previous governments (Vanberg,
2015).
For Ordo-liberalism, competition and the market do not amount to natural
economic realities, having their own principal laws that governments must
respect and bear in mind (Oksala, 2011). For Ordo-liberals, competition and the
market can only survive if supported with political interventions. Ordo-liberalism
was seen as having a radical conviction to this anti-naturalistic conception of the
market and competition, believing both must be heavily conditioned and
facilitated by the state (Peacock & Willgerodt, 1989). These fundamental
economic mechanisms can only function if supported, or bolstered, by
government social policies. They must also be consistently guaranteed by legal
measures (Bonefeld, 2012). For Ordo-Liberals pure competition is neither
something that exists naturally nor will it ever be fully attained, however, the idea
of pure competition is important in of itself due to it working as a platonic ideal
(O’Neil, 2002). This ideal, represents the justification for a projected target which
necessitates incessant and active politics to uphold the momentum of the
economy. This represents the ideological shift to “No matter how many problems
arise the state must always support the market” (Goldschmidt & Wohlgemuth,
2008). Ordo-liberals believe that the state and the market economy are not
juxtaposed but that the one mutually presumes the existence of the other.