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According to Ordoliberalism (also called German neoliberalism), 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.^[1] 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 good government, 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." The state should form an economical order instead of directing economical processes.

Ordoliberalism was developed in the 1930s-1950s by German economists and legal scholars such as Wilhelm Röpke (who spent the Nazi period in exile in Turkey), Walter Eucken, Franz Böhm and Hans Großmann-Doerth to create the German social market economy.

Ordoliberalism was centered around the academic journal Ordo: Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft. Among the contributors to journal were Franz Böhm, Walter Eucken, Ludwig Erhard, Friedrich Hayek, Alexander Rüstow, and others.

Wilhelm Röpke considered Ordoliberalism to be "liberal conservatism," against capitalism in his work Civitas Humana (A Humane Order of Society, 1944). Alexander Rüstow also has criticized laissez-faire capitalism in his work Das Versagen des Wirtschaftsliberalismus (1950). The Ordoliberals thus separated themselves from other traditional liberals, the "paleoliberals," like Ludwig von Mises and Friedrich Hayek.

For their political philoshopy, Ordoliberals were influenced by Aristotle, De Tocqueville, Hegel, Spengler and Karl Mannheim.

• Aktionsgemeinschaft Soziale Marktwirtschaft - German Ordoliberal association.

1. ^ Megay, Edward N. (1970). "Anti-Pluralist Liberalism: The German Neoliberals". Political Science Quarterly 85 (3). DOI:10.2307/2147878. 

• Friedrich, Carl J. (1955). "The Political Thought of Neo-Liberalism". American Political Science Review 49 (2): 509-525. DOI:10.2307/1951819. 
• Alan Peacock and Hans Willgerodt (eds): Germany’s Social Market Economy: Origins and Evolution, Macmillan

• Freiburg School
• Liberal conservatism
• Neoliberalism
• Neosocialism
• Social market economy