Please excuse some thinking aloud here. I think it might be instructive, when thinking about a public policy perspective, to evaluate how neatly it fits in with what we might be able to call “ordoliberalism.” By this I mean the standards of public policy you would see advocated in an introductory economics textbook, but at a much higher intellectual level. Or, you can think of it as Hicksian efficiency maximization with lump sum transfers. To what extent can a given policy proposal be viewed as an attempt at making the economy more efficient, and to what extent does it make transfers more like lump sum transfers (setting aside whether it increases the total amount of transfers or not)?
In some ways this is very banal, i.e., to what extent does the public policy readily fit in with what “the” economist thinks about these things? Then, to whatever extent it does not fit in with what “the” economist thinks, what are the ends the policy is seeking to achieve? How well will it achieve those ends? At what cost?
To give this some teeth, consider:
-This is a clear break from market socialist-lite that was near mainstream (if not mainstream) in mid-century economics. After all, that is where the term “ordoliberalism” originates from! This is Ludwig Erhard, not Paul Samueslon.
-By that standard, Friedman and yes Hayek (though not all “Hayekians”) are readily labeled “ordoliberals.”
-This can be viewed as a reaction to the arguments in favor of the government running key industries, as opposed to trying to make the industry better as someone like Marshall or Harberger would approach it. Do taxes and subsidies, not Commanding Heights.
-Regarding, for example, Obamacare, a lot of it can be boiled down to increasing transfer payments, which “the” economist is agnostic about. But its transfer payments are in-kind, or essentially in-kind, which “the” economist says is a stupid way of doing it. Some of Obamacare is trying to support more experimentation on the public side of things, which “the” economist may approve of (for reasons analogous to basic science). But much of Obamacare, including the core of it, looks like Commanding Heights, certainly not keyhole solutions. It’s not the nationalization of an industry, but the style is pure command and control.
-Medicare Part D, of course, should be viewed simply as a collection of poorly executed in-kind transfer payments.
There are many free market advocates who keep their language anchored to this framing. Greg Mankiw does (outside of his explicitly philosophical posts). Scott Sumner is actually excellent on this. Every op-ed of the late Gary Becker did this. However, obviously on the right, many can quickly get very deonotological (not just Rothbardians either), even when ostensibly talking about “economics.” And I offer quite a bit of incredulity to free market advocates who imply that the EITC cannot allow the poor to achieve a higher level of consumption that they would otherwise.
However, regarding economics pundits and bloggers on the left, while it seems clear that they have something like ordoliberalism as the background model for the arguments they are making, they are not clear about 1) when what they are saying simply falls in line with ordoliberalism, 2) when it is the result of other concerns (which they are no expert on), like fairness, and 3) when it is simple party politics. Counterexample? Perhaps Justin Wolfers, but I am not sure.
I think the best, clearest, and most consistent ordoliberals are free market advocates, but among free market advocates there is higher variance. Greg Mankiw is better at it than Paul Krugman, but Walter Block is worse at it than James Galbraith.
Maybe this is completely off base, but it’s a thought.