In:
Zeitschrift für Wirtschaftspolitik, Walter de Gruyter GmbH, Vol. 50, No. 2 ( 2001-8-1), p. 217-250
Abstract:
As well interventionist as ordo-liberal strategies have a long tradition in German economic policy. Interventionism is not only supported by Keynesian economics but also by the neo-classical approach. In contrast to the common view in neo-classical mainstream - as comparative-static analysis method - in this paper scientific isolation of economic phenomenon will be rejected. The economic system is very complex. Therefore economists have to discuss appropriate methods to analyse economic policy strategies. In this paper the problem of complexity in society in common and in economics strictly is discussed. It can be shown that complexity and nonlinearity are main characteristics of dynamic economic processes. An additional problem - resulting from the characteristic of complexity - is the existence of a constitutional lack of knowledge. No one in society, neither a scientist nor an economic policy maker, is able to collect all the necessary knowledge. Therefore interventionist strategies in economic policy are weaker than ordo-liberal ones. Because of the necessity of adaptation-flexibility in dynamic economic systems an “Evolutionary Economic Policy”, characterised by ordo-liberal insights in the importance of economic and political order and evolutionary views on economic processes as discovery procedures, are advocated. But why interventionist strategies are so successful in economic policy - not only in Germany? By using a neo-classical model of institutional competition, including transaction costs etc, the dominant position of interventionist strategies cannot be explained. Therefore in this paper an analysis, basing on systems theory and the ordo-liberal idea of interdependencies of orders, is used to show the complexity in real society according to the choice of strategies in economic policy. It can be shown that dependencies with the political subsystem are mostly important for this dominant position of interventionist strategies. As Hayek predicted a long time ago, a rise of the welfare state occurred in the western world. But interventionist policies are also supported by the formation of a mainstream in economics, dominated by the neo-classical theory, and by cultural factors, by internal institutions and path-dependency. The result of this analysis is a paradox: Complexity in society and especially in economics requires ordo-liberal strategies in economic policy. But at the same time the existence of complexity in society is main argument for the problems relative to the introduction of such strategies, which are more adaptive and thereby more useful in economic policy. Hopefully nowadays by the pressure of international institutional competition, called “globalisation”, ordo-liberal and evolutionary strategies will be supported more.
Type of Medium:
Online Resource
ISSN:
2366-0317
,
0721-3808
DOI:
10.1515/zfwp-2001-0209
Language:
English
Publisher:
Walter de Gruyter GmbH
Publication Date:
2001
detail.hit.zdb_id:
2112616-1
detail.hit.zdb_id:
2259867-4
detail.hit.zdb_id:
865276-4
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