The Ordoliberal Notion of Market Power: An Institutionalist Reassessment

"The purpose of this article is not to defend per se the OL (ordoliberalism) approach but to offer a reassessment through which to evaluate its pros and cons. The Old-Institutionalism (OI) of T Veblen and JR Commons will support this task. Such support is motivated by the fact that current scholars have revised and updated many of OI’s concepts, and thus we try to transfer and apply part of these contributions to OL. Many connections between OI and OL can be stated.Both of them had been dominant paradigms, and above all they share the common idea that a legal system does not lead necessarily to a restriction of “human interaction” as in Douglass North’s definition of institutions. The law could liberate individuals’ opportunities and activities and extend freedoms. In particular, the institutionalist Robert Lee Hale advocated “freedom through law”, which is also the title of his most important book. Similarly, OL relies on (competition) law being seen as a liberation rather than a constraint. Although there are many theoretical connections between OI and OL, there are no works in literature that try to illustrate and exploit these convergences among OI and OL as this article does. I reassess three main results of OL: (i) as-if competition (Section B), (ii) the polarisation of economic power (Section C), and (iii) competition as an end in itself (Section D). Section E summarises the main findings."