Question

The following is based on the book Austerity: The history of a Dangerous Idea, please assist with this essay.

“Ordningspolitik therefore constrains the state that practices it, and the private sector that grows within it, through the indirect regulation of the economic constitution” (Blyth, p. 136, Chapter 5). Explain in a 300 word essay format and provide examples.

Thank you!

Answer 1

A problem that has no simple and final solution in a world in which the problems that we face and our knowledge of how to

deal with these problems constantly change. It requires the continuous efforts of an adequate constitutional politics or

Ordningspolitik. The same is true, and for the same reasons, with regard to the creation and maintenance of an appropriate

institutional-constitutional framework or Ordningsrahmen for inter-governmental competition. This too requires the continuous

efforts of an adequate federal Ordningspolitik. Furthermore, a competitive order in the realm of politics is in need of

constitutional safeguards against anti-competitive interests, no less so than the competitive order of the market. Politicians,

like anybody else, do not like to be subject to competitive constraints, and they are not less tempted than others to seek relief

from competitive pressure. Competition in ordinary markets is there to benefit consumers, not to please businessmen; and

competition between governments is there to benefit citizens, not to please politicians. Just as consumer interests are the only

directly justifiable economic interests, so citizen's interests are the only directly justifiable interests in politics. The appropriate

measuring rod for the desirability of the institutional constitutional order of markets is its effectiveness in making suppliers

responsive to consumer interests or, in other words, its effectiveness in enhancing consumer sovereignty. The appropriate

measuring rod for the desirability of the institutional-constitutional order of politics is its effectiveness in making governments

responsive to citizens or, in other words, its effectiveness in enhancing citizens sovereignty. Competition between firms and

governments is desirable because it makes for responsiveness to consumers’ and citizens’ interests. And it is for the sake of

consumers’ and citizens’ interests that competition needs constitutional safeguards in both arenas against the inclinations of

those who would rather do without.

The creation of a federal union will always include both components. My point, however, is that the emphasis can be more on

one or the other principle, and that the nature of a federal union can be critically different, depending on where the overall

weight lies. To be sure, under both principles the national governments will have to sacrifice part of their power. But this

sacrifice means totally different things if the one rather than the other principle is applied. Under centralist federalism, authority

is shifted from one political agency to another, from the national governments to a central government, increasing the degree

of political centralization. Under competitive federalism, the power that national governments will have to sacrifice is not shifted

to some other governmental authority but is, instead, dissipated in a competitive arrangement. It returns, in effect, to the

ultimate sovereigns, the individual citizens whose choice options are increased compared with the previous national

constitutional arrangement.