History of Economic Thought. Neoliberalism 1940-1950s V. Eucken and his concept of “economic order” (the most important)

Lecture notes, cheat sheets
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History of Economic Thought. Neoliberalism 1940-1950s V. Eucken and his concept of “economic order” (the most important)

Lecture notes, cheat sheets

Directory / Lecture notes, cheat sheets

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80. NEOLIBERALISM 1940-1950s. V. EUKEN AND HIS CONCEPT OF "ECONOMIC ORDER"

The most complete embodiment of economic theory and practice neoliberalism found in Germany. Especially after the collapse of the Third Reich, neoliberalism experienced a rebirth and found successful practical application in West Germany. Here starting from 1948 BC these ideas have acquired the status of the state doctrine of the government Adenaura - Erhard.

In Germany, the neoliberal trend was introduced Freiburg School (its leaders are V. Eucken, V. Repke, A. Ryustov and etc.). Founder of the school Walter Eucken, among the theorists of market economics, stood out for his desire to overcome the stereotypes of established concepts.

Walter Eucken (1891-1950). Born in Jena, received a good education.

The main issues raised Euken, are set out in two works: "Fundamentals of the National Economy" (1940) и "Basic Principles of Economic Policy" (1950).

Oyken and his allies set themselves the goal of developing a theory of such an economic order that would guarantee the rights, freedoms and dignity of every person who would be in essence anti-totalitarian.

First major work Eucken - "Fundamentals of the National Economy" - marked the beginning of the turn of German economic science from the “historical school” to the neoclassical direction. This work sets out the main provisions of his theory, called "theory of economic order".

economic order - these are the real forms in which the activities of firms, organizations, individual participants take place.

Oyken believes that political, economic, social and legal orders are interdependent. Any particular economy consists of the same set of elements (division of labor, credit, profit, interest, wages, etc.), but these elements are combined each time in a new way, depending on the dominant principle (decentralization or centralization), and as well as historical circumstances.

In the second work "Basic principles of economic policy" considers the "policy of order", the policy of regulating the economic process. The most extensive field of activity for economic policy is the "legal and social order".

Economic policy, emphasized Oyken, should not be opportunistic, carried out for the sake of solving immediate problems and violating the reality of the price system.

Oyken believes that prices play the role of a kind of "instrument" that measures the level of scarcity of resources and products and signals this to all participants in the market process.

Oyken was categorically against planning at the level of the national economy (but not at the enterprise, where it is even necessary, and where it can cover the entire process). Criticizing planning, as well as Keynesian methods of intervention in the economy, Oyken opposed the free market of the XIX century. The scientist was well aware that competition does not appear and is not reproduced automatically, but is ousted by monopoly, and therefore needs special protection.

Author: Tatarnikov E.A.

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