Ordoliberalism

According to ordoliberalism, the state must create a proper legal environment for the Economy and maintain a healthy level of Competition through measures that adhere to Market Principles . The concern is that, if the state does not take active measures to foster competition, firms with Monopoly (or Oligopoly ) power will emerge, which will not only subvert the advantages offered by the Market Economy , but also possibly undermine Democracy itself, since strong economic power can be transformed into political power.
Quoting Stephen Padgett: "A central tenet of ordo-liberalism is a clearly defined division of Labor in economic management, with specific responsibilities assigned to particular institutions. Monetary Policy should be the responsibility of a Central Bank committed to monetary stability and low Inflation , and insulated from political pressure by independent status. Fiscal Policy - balancing Tax Revenue against Government Expenditure - is the domain of the government, whilst Macro-economic policy is the preserve of Employers and Trade Unions ."

Ordoliberalism was developed in the 1930s - 1950s by German Economists such as Wilhelm Röpke (who spent the Nazi period in Exile ), Walter Eucken , Franz Böhm and Hans Großmann-Doerth to create the German Social Market Economy .

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Ordoliberalism