How Ordo-Liberal Is Germany? Ordo-Liberalism in Post-War National Unifying Mythology

This chapter examines the myth and reality of Ordo-liberal intellectual capture of Germany and the role of Ordo-liberalism in efforts to construct a new post-war national unifying myth. It focuses on the genesis of the concept of the social market economy and its relationship to Ordo-liberalism; on the distinction between fundamentalists and realists in Ordo-liberalism; and on the differences between philosopher-economists and statesmen-economists. Close attention is paid to the ideas and role of Ludwig Erhard and his network of support; the institutional appropriation of Ordo-liberalism by the Bundesbank, the federal cartel office, and the federal economic ministry’s economic policy division; and the role of Ordo-liberalism in competition policy, in European economic and monetary union, and in German policy during the euro area crisis. At the same time, stress is placed on the gaps in Ordo-liberal thinking and counter-national unifying myths, drawing on social Catholicism, social partnership, and civilian power. The chapter has three main case studies: of Ordo-liberalism in the Great Depression, focusing on the Brauns Commission, the Lautenbach Plan, and the role of Wilhelm Röpke; central bank independence, monetary policy reform in the early 1970s, and the ‘monetarist revolution’; and Alfred Müller-Armack’s proposal for a European Stabilization Board. These case studies use archival evidence. The chapter closes with reflections on the significance of Ordo-liberalism in Germany.