Response to Parakkal’s Comments

• Author: Conor Talbot
• DOI: 10.1177/0003603X16644121
• Published date: 01 June 2016
• Date: 01 June 2016

Article

Response to Parakkal’s Comments

Conor Talbot*

The dominant question that strikes me from reading Raju Parakkal’s commentary is whether the EU

has succeeded in achieving a democratic capitalist society using the Ordoliberal model of competition.

As noted in my paper, Ordoliberalism alone is not seen as capable of being used as a guiding principle

upon which the EU could construct an economy or a society. We must, therefore, look to the influence

of Ordoliberalism amongst other factors at play in the EU. Perhaps one way of assessing whether the

EU has indeed succeeded in achieving a democratic capitalist society, and the role played by Ordo-

liberalism in that, is to look to how the EU reacts to financial and economic crises. One way of viewing

the mainstream economics adopted in the EU today is that it tends to conceive society as governed by a

general tendency toward equilibrium, where crises and change are no more than temporary deviations

from the steady state of a normally well-integrated system. As such, crises appear as punishment for

governments’ failing to respect the natural laws that are the true governors of the economy. The central

tenet of Ordoliberalism, meanwhile, is that governments should regulate markets in such a way that

market outcomes approximate the theoretical outcome in a perfectly competitive market. In that sense,

good economic policy to an Ordoliberal is nonpolitical by definition. In line with some important

aspects of Ordoliberal teachings, the capitalist dimension of the EU has sought to minimize democratic

opportunism through the introduction of self-regulating markets. However, the widespread criticism of

the democratic deficit within the EU continues, and the aim of my contribution was to highlight how

competition policy has been employed as an essentially political tool to temper the dislocations in the

EU’s market economies that arise as a result of the capitalist tendencies towards self-regulation.

Perhaps the most important aspect of the influence of Ordoliberalism in this regard has been the

creation of strong decision-making institutions that, while cognizant of public policy, have typically

been independent in their development of competition policy. The type of integration undertaken

within the European project has political and economic consequences precisely because it tends to

mold—if not contradict—individual EU Member States’ political decisions. This type of integration,

carried out through legal channels, seeks to align domestic political decisions and has also changed the

political paradigm by altering Member States’ options and perspectives. Therefore, the integration

facilitated by the partial application of Ordoliberal teachings has allowed the EU to pursue a path

whereby the growth and expansion imperatives of capitalist thinking have been combined with initia-

tives to alleviate democratic opposition and create a space in which a deeper, multifaceted EU could

emerge.

*European University Institute, Firenze, Italy

Corresponding Author:

Conor Talbot, European University Institute, Via Boccaccio 121, I-50133 Firenze, Italy.

Email: conor.talbot@eui.eu

The Antitrust Bulletin

2016, Vol. 61(2) 293-295

ªThe Author(s) 2016

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DOI: 10.1177/0003603X16644121

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