Wu Jinglian, 95: Germany's Economic Debate Worthy of Our Serious Study (AI Translation)

95岁高龄吴敬琏：德国经济学争论值得我们认真研究

[para. 1] On March 25, the book *The Future of Economics: Responses from the German Academic Community* was introduced at Peking University's National School of Development. The book, co-edited by Lars Feld and Hu Kun, explores key economic debates in German academia from 2009 to 2019, highlighting the divergence between ordoliberalism and Keynesian economics. Chinese economist Wu Jinglian regards this debate as essential for Chinese economists to study. He wrote the book's preface and emphasized the need to learn from Germany’s economic experiences.

[para. 2] The origins of the German debate trace back to the University of Cologne replacing its ordoliberalism-based courses with Keynesian macroeconomics, leading to wider discussions on the future of Germany’s economy and society. The debate split economists into two camps: supporters of Germany’s historically rooted ordoliberalism and advocates of adopting Anglo-Saxon economics. Ordoliberalism, unique to Germany, focuses on maintaining market order through government-backed frameworks without direct intervention in market activities. Wu highlights the debate’s core as addressing whether Germany should adhere to ordoliberalism or adopt Keynesian principles for its economic future.

[para. 3] Ordoliberalism emerged in the 1930s during Nazi rule as economists opposed restrictive state-controlled policies. In the post-war period, Ludwig Erhard implemented ordoliberal principles by liberalizing prices and introducing the Deutsche Mark in 1948, laying the foundation for the "German Economic Miracle" and shaping Germany’s social market economy.

[para. 4] Wu Jinglian elaborated on ordoliberalism’s distinctiveness, underscoring its belief that free markets require specific institutional conditions provided by a market-friendly government, such as the rule of law and property protection. However, this approach avoids excessive government intervention in businesses. Wu believes these lessons are relevant to today’s debates about market-government roles, arguing against polarizing views that suggest governments should "control everything" or do "nothing at all."

[para. 5] Germany’s journey through economic reforms was turbulent. By the 1960s, faced with economic fluctuations, Germany adopted Keynesian-inspired expansionary policies for short-term benefits. However, prolonged interventions led to stagflation in the 1970s, resulting in policy corrections under the Kohl administration in the 1980s, reviving ordoliberalism and sustainable economic growth.

[para. 6] Wu also noted comparisons between Germany and Japan following the 1985 Plaza Accord. Japan pursued expansive monetary policies that ultimately led to a financial collapse, stagnating its economy. In contrast, Germany adhered to ordoliberal principles, avoiding harmful monetary expansions and achieving smoother recoveries from crises. This adherence helped Germany avoid prolonged downturns and foster economic resilience.

[para. 7] Despite its historical success, Germany’s economic policies took a "leftward shift" after 2012, adopting Keynesian-style measures such as monetary expansions and relaxed debt limitations. This shift contributed to economic stagnation, with the German economy contracting for two consecutive years in 2023 and 2024. Wu observed that the German academic community, once critical of ordoliberalism, is now re-evaluating its importance, with many economists calling for its revival.

[para. 8] Wu stressed that theoretical debates, like those outlined in *The Future of Economics*, directly impact real-world economies. He questioned whether Germany will undertake new institutional and structural reforms to restore economic stability, emphasizing the broader implications for global economics. Wu concluded by urging economists to focus on how theories align with and address practical realities, fulfilling the discipline’s responsibility to guide effective policymaking.