Ordoliberalism is the theory behind the German social market economy. Its theoretical stance developed in the context of the economic crisis and political turmoil of the Weimar Republic in the late 1920s. It is premised on the strong state as the locus of liberal governance, and holds that economic freedom derives from political authority. In the context of the crisis of neoliberal political economy and austerity, and debates about the resurgence of the state vis-à-vis the economy, the article introduces the ordoliberal argument that the free economy presupposes the exercise of strong state authority, and that economic liberty is a practice of liberal governance. This practice is fundamentally one of social policy to secure the sociological and ethical preconditions of free markets. The study of ordoliberalism brings to the fore a tradition of a state-centric neoliberalism, one that says that economic freedom is ordered freedom, one that argues that the strong state is the political form of free markets, and one that conceives of competition and enterprise as a political task.

The crisis of 2008 is said to have brought the state back in, and its resurgence, in turn, is seen as revealing post-neoliberal tendencies. This analytical framework implies a conception of market and state as two distinct modes of social organization, and the perennial question about such a conception is whether the market has autonomy vis-à-vis the state, or the state vis-à-vis the market. Their social constitution as distinct forms of social relations is not raised. This paper argues that the capitalist state is fundamentally a liberal state. This conception entails class as the determining category of its form and content.

Recent debates on abstract labour have highlighted Marx’s ambivalent conception of this important term. This article criticises current physiological definitions of the term, and against the background of earlier debates in Capital & Class, develops abstract labour as a specifically capitalist form of labour which entails a specific conception of social labour time—a time made abstract. The political implications of these rival accounts are formidable.

The contribution examines the market liberal veracity of Hayek’s view that a dictatorship may be more liberal in its policies than an unlimited democratic assembly. Hayek’s warning about the potentially illiberal character of democratic government is key to the German ordoliberal thinking that emerged in the context of the crisis of the Weimar Republic. The ordoliberal thinkers were keenly aware of Schmitt’s political theology and argued with him that the state is the predominant power in the relationship between market and state, conceiving of this relationship as free economy and strong state. They maintained that the establishment of social order is the precondition of free economy; law does not apply to disorder and does not create order. The liberal state is the ‘concentrated force’ of that order. The contribution argues that ordoliberalism is best characterized as an authoritarian liberalism and assesses its contemporary veracity in relation to the European Union.

In the context of the contemporary crisis of neoliberal political economy, the politics of austerity has reasserted the liberal utility of the state as the political authority of market freedom. This article argues that economy has no independent existence, and that instead, economy is a political practice. It examines the political economy of Adam Smith and the German ordoliberal tradition to decipher the character of the political in political economy and its transformation from Smith's liberal theory into neoliberal theology. Ordoliberalism emerged in the late 1920s at a time of a manifest crisis of political economy, and its argument was fundamental for the development of the neoliberal conception that free economy is matter of strong state authority. The conclusion argues with Marx that the state is the concentrated force of free economy.