Polanyian Means to Hayekian Ends: ‘Ordoliberalism on Steroids' in EU Governance

• In Event: European Union Politics

Abstract

This paper asks what sort of political-economic system the European Union has grown into since the mid-1980s. The governing principles of the single market and the euro feature a unique combination of Hayekian and Polanyian principles usually seen as polar opposites. The core normative vision is much like Hayek’s ideal federation: a multi-level polity in which central government fosters openness across subunits to deliver wide-ranging competition and fiscal conservatism. But Hayekians generally detest today’s EU, since it has far more central authority than they endorse. Indeed, the EU’s core political strategy implies a Polanyian logic – markets are unnatural political constructs that depend on strong assertion of central authority – though Polanyians detest its Hayekian normative vision. In recent years, this combination has often been described as ordo-liberal, i.e. strong state action in pursuit of Hayekian-style goals. This makes sense, but not much, since ordoliberals also generally dislike today’s EU for having taken on too much active economic authority. Moreover, it is hard to argue historically that ordoliberals played a strong direct role in building the EU. We argue that today’s EU is a ramped-up form of ordo-liberalism – “ordoliberalism on steroids” – resulting from an unintended political intersection of Hayekian and Polanyian agendas.

Authors

• Craig A. Parsons, University of Oregon

• Matthias Matthijs, Johns Hopkins University