IDEAS home Printed from https://ideas.repec.org/p/zbw/wgspdp/201702.html
   My bibliography  Save this paper

Competition or conflict? Beyond traditional ordo-liberalism

Author

Listed:
  • Dold, Malte
  • Krieger, Tim

Abstract

According to the traditional ordo-liberal view of the Freiburg School, the central role of the state in economic affairs is to set up rules that create a competitive order within which private actors have sufficient incentives to coordinate their economic affairs efficiently. Underlying this view is the implicit assumption that, given the right institutional framework, competition within markets is mainly characterized by peaceful and conflict-free rivalry between actors that leads to an optimal allocation of resources. In such a setting, competition may be described as a "record-type" game. This view, however, ignores the possibility that competition itself may very well trigger conflict rather than having an appeasing effect. In this case, competition appears to be a "struggle-type" game in which competitors invest in conflict activities that are not efficiency enhancing but rather resource wasting. Against this background, ordo-liberalism has yet to provide a clear-cut distinction between competition and conflict. In addition, it fails to identify - in a normative way - which institutional and regulatory framework could hamper conflict sensitivity of economic competition, given the harmful effect of conflict on the security of property rights. Our contribution investigates how the ordo-liberal research program needs to be extended when introducing conflict.

Suggested Citation

  • Dold, Malte & Krieger, Tim, 2017. "Competition or conflict? Beyond traditional ordo-liberalism," Discussion Paper Series 2017-02, University of Freiburg, Wilfried Guth Endowed Chair for Constitutional Political Economy and Competition Policy.
  • Handle: RePEc:zbw:wgspdp:201702
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/155330/1/880865172.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bos, Dieter & Tillmann, Georg, 1985. "An 'Envy Tax': Theoretical Principles and Applications to the German Surcharge on the Rich," Public Finance = Finances publiques, , vol. 40(1), pages 35-63.
    2. Krieger, Tim & Meierrieks, Daniel, 2016. "Political capitalism: The interaction between income inequality, economic freedom and democracy," European Journal of Political Economy, Elsevier, vol. 45(C), pages 115-132.
    3. Albert O. Hirschman & Michael Rothschild, 1973. "The Changing Tolerance for Income Inequality in the Course of Economic DevelopmentWith A Mathematical Appendix," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(4), pages 544-566.
    4. Williamson, Oliver E, 1979. "Transaction-Cost Economics: The Governance of Contractural Relations," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 233-261, October.
    5. Anderton, Charles H & Anderton, Roxane A & Carter, John R, 1999. "Economic Activity in the Shadow of Conflict," Economic Inquiry, Western Economic Association International, vol. 37(1), pages 166-179, January.
    6. Arnsperger, Christian, 1994. "Envy-Freeness and Distributive Justice," Journal of Economic Surveys, Wiley Blackwell, vol. 8(2), pages 155-186, June.
    7. Tim Krieger & Daniel Meierrieks, 2016. "Land Grabbing and Ethnic Conflict," Homo Oeconomicus: Journal of Behavioral and Institutional Economics, Springer, vol. 33(3), pages 243-260, October.
    8. Hirschman, Albert O., 1973. "The changing tolerance for income inequality in the course of economic development," World Development, Elsevier, vol. 1(12), pages 29-36, December.
    9. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    10. Keith Hartley & Todd Sandler (ed.), 2007. "Handbook of Defense Economics," Handbook of Defense Economics, Elsevier, edition 1, volume 2, number 1.
    11. Nripesh Podder, 1996. "Relative Deprivation, Envy and Economic Inequality," Kyklos, Wiley Blackwell, vol. 49(3), pages 353-376, August.
    12. Tim Krieger & Daniel Meierrieks, 2016. "Does Income Inequality Lead to Terrorism?," CESifo Working Paper Series 5821, CESifo.
    13. Bowles, Samuel, 1985. "The Production Process in a Competitive Economy: Walrasian, Neo-Hobbesian, and Marxian Models," American Economic Review, American Economic Association, vol. 75(1), pages 16-36, March.
    14. Buchanan, James M, 1987. "The Constitution of Economic Policy," American Economic Review, American Economic Association, vol. 77(3), pages 243-250, June.
    15. Michael Kumhof & Romain Rancière & Pablo Winant, 2015. "Inequality, Leverage, and Crises," American Economic Review, American Economic Association, vol. 105(3), pages 1217-1245, March.
    16. Varian, Hal R., 1974. "Equity, envy, and efficiency," Journal of Economic Theory, Elsevier, vol. 9(1), pages 63-91, September.
    17. repec:bla:kyklos:v:49:y:1996:i:3:p:353-76 is not listed on IDEAS
    18. Gavin Kerr, 2016. "‘Predistribution’, property-owning democracy and land value taxation," Politics, Philosophy & Economics, , vol. 15(1), pages 67-91, February.
    19. Werner Bonefeld, 2012. "Freedom and the Strong State: On German Ordoliberalism," New Political Economy, Taylor & Francis Journals, vol. 17(5), pages 633-656, November.
    20. Mui, Vai-Lam, 1995. "The economics of envy," Journal of Economic Behavior & Organization, Elsevier, vol. 26(3), pages 311-336, May.
    21. Kirchsteiger, Georg, 1994. "The role of envy in ultimatum games," Journal of Economic Behavior & Organization, Elsevier, vol. 25(3), pages 373-389, December.
    22. Vanberg, Viktor J., 2004. "The Freiburg School: Walter Eucken and Ordoliberalism," Freiburg Discussion Papers on Constitutional Economics 04/11, Walter Eucken Institut e.V..
    23. Garfinkel, Michelle R. & Skaperdas, Stergios, 2007. "Economics of Conflict: An Overview," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 2, chapter 22, pages 649-709, Elsevier.
    24. Geoffrey M. Hodgson, 2004. "Opportunism is not the only reason why firms exist: why an explanatory emphasis on opportunism may mislead management strategy," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 13(2), pages 401-418, April.
    25. Nitzan, Shmuel, 1994. "Modelling rent-seeking contests," European Journal of Political Economy, Elsevier, vol. 10(1), pages 41-60, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Malte F. Dold, 2018. "Back to Buchanan? Explorations of welfare and subjectivism in behavioral economics," Journal of Economic Methodology, Taylor & Francis Journals, vol. 25(2), pages 160-178, April.
    2. Malte Dold & Tim Krieger, 2023. "The ideological use and abuse of Freiburg’s ordoliberalism," Public Choice, Springer, vol. 195(3), pages 341-361, June.
    3. Malte Dold & Tim Krieger, 2019. "The “New” Crisis of the Liberal Order: Populism, Socioeconomic Imbalances, and the Response of Contemporary Ordoliberalism," Journal of Contextual Economics (JCE) – Schmollers Jahrbuch, Duncker & Humblot, Berlin, vol. 139(2–4), pages 243-258.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Justina A.V. Fischer & Benno Torgler, 2013. "Do Positional Concerns Destroy Social Capital: Evidence From 26 Countries," Economic Inquiry, Western Economic Association International, vol. 51(2), pages 1542-1565, April.
    2. Justina A.V. Fischer & Benno Torgler, 2007. "Social Capital and Relative Income Concerns: Evidence from 26 Countries," CREMA Working Paper Series 2007-05, Center for Research in Economics, Management and the Arts (CREMA).
    3. Vahabi,Mehrdad, 2019. "The Political Economy of Predation," Cambridge Books, Cambridge University Press, number 9781107591370.
    4. Benno Torgler & Markus Schaffner & Sascha L. Schmidt & Bruno S. Frey, 2008. "Do Employees Care about their Relative Position? Behavioural Evidence Focusing on Performance," CREMA Working Paper Series 2008-12, Center for Research in Economics, Management and the Arts (CREMA).
    5. Justina A.V. Fischer & Benno Torgler, 2013. "Do Positional Concerns Destroy Social Capital: Evidence From 26 Countries," Economic Inquiry, Western Economic Association International, vol. 51(2), pages 1542-1565, April.
    6. Malte Dold & Tim Krieger, 2023. "The ideological use and abuse of Freiburg’s ordoliberalism," Public Choice, Springer, vol. 195(3), pages 341-361, June.
    7. Mujcic, Redzo & Oswald, Andrew J., 2018. "Is envy harmful to a society's psychological health and wellbeing? A longitudinal study of 18,000 adults," Social Science & Medicine, Elsevier, vol. 198(C), pages 103-111.
    8. Mui, Vai-Lam, 1995. "The economics of envy," Journal of Economic Behavior & Organization, Elsevier, vol. 26(3), pages 311-336, May.
    9. Luis Corchón & Matthias Dahm, 2010. "Foundations for contest success functions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 43(1), pages 81-98, April.
    10. Mehrdad Vahabi, 2011. "The Economics of Destructive Power," Chapters, in: Derek L. Braddon & Keith Hartley (ed.), Handbook on the Economics of Conflict, chapter 5, Edward Elgar Publishing.
    11. Ronayne, David & Sgroi, Daniel, 2018. "When Good Advice is Ignored : The Role of Envy and Stubbornness," CRETA Online Discussion Paper Series 38, Centre for Research in Economic Theory and its Applications CRETA.
    12. Mujcic, Redzo & Oswald, Andrew J., 2018. "Is Envy Harmful to a Society’s Psychological Health and Wellbeing? A Longitudinal Study of 18,000 Adults," CAGE Online Working Paper Series 361, Competitive Advantage in the Global Economy (CAGE).
    13. Yukihiro Nishimura, 2008. "Envy Minimization In The Optimal Tax Context," Working Paper 1178, Economics Department, Queen's University.
    14. Wen-Chun Chang, 2013. "Climbing up the Social Ladders: Identity, Relative Income, and Subjective Well-being," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 113(1), pages 513-535, August.
    15. Li, Linyang, 2018. "Financial inclusion and poverty: The role of relative income," China Economic Review, Elsevier, vol. 52(C), pages 165-191.
    16. Dasgupta, Indraneel, 2009. "'Living' wage, class conflict and ethnic strife," Journal of Economic Behavior & Organization, Elsevier, vol. 72(2), pages 750-765, November.
    17. Johannes Münster, 2009. "Group contest success functions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 41(2), pages 345-357, November.
    18. Ávalos, Eloy, 2014. "Envidia, intolerancia y bienestar social [Envy, intolerance and social welfare]," MPRA Paper 61212, University Library of Munich, Germany.
    19. Boudreau, James W. & Shunda, Nicholas, 2012. "On the evolution of prize perceptions in contests," Economics Letters, Elsevier, vol. 116(3), pages 498-501.
    20. Mehrdad Vahabi, 2012. "Avant-Propos," Revue d'économie politique, Dalloz, vol. 122(2), pages 135-151.

    More about this item

    Keywords

    ordo-liberalism; Freiburg School; conflict economics; competition;
    All these keywords.

    JEL classification:

    • B25 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Historical; Institutional; Evolutionary; Austrian; Stockholm School
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:wgspdp:201702. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/wffrede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.