We people of the Anglosphere need to learn the peculiar use among German-speaking economists of the Latin word ordo (‘arrangement’), as in der Ordoliberalismus. The historian Quinn Slobodian’s fascinating book is the place to learn. Although he writes with elegance and clarity, his story is a mite intricate. Pay sharp attention, class.

The ordoliberals drew their lesson from the wild popularity of Nazism. A strong government of law-bound technicians devoted to the common good, said the sages of Geneva and Freiburg, should supervise democracy and the market, preventing us from tipping into either fascism or communism. The ordoliberal motto was ‘strong state and free market’. Ludwig Erhard applied it to postwar West Germany with satisfactory results. The international version has been amazingly successful – until, it may be, now.

Ordoliberalism lies at the core of modern international neoliberalism. Slobodian traces its origins back to the shock that the First World War delivered to liberal capitalism. He shows how continental advocates of liberalism, at first in a much-reduced Austria and then, especially, in Geneva and beyond, began to argue for institutions ‘safeguarding capitalism at the scale of the entire world’. This approach gave rise to ‘the League of Nations, international investment law, blueprints for supranational federation, systems of weighted franchise, European competition law, and ultimately the WTO’. Hence Slobodian’s title, Globalists. German-speaking liberals devoted to ordo continuously pressed for such institutions and, over time, got them.

In Globalists, Slobodian narrates the history of the 20th century from the point of view of international ordoliberalism. Its champions, adopting the arguments of the jurist Carl Schmitt, saw two overlapping worlds at play: the world of ‘imperium’, where governments rule over people, and the world of ‘dominium’, encompassing property and money. A global, top-down imperium, the story goes, was needed to prevent messy populisms from dropping bombs on the dominium of the market (consult the history of Latin America since 1946, for instance). These globalists, led by what Slobodian calls the Geneva School, a loose group of thinkers active from the end of the First World War to the last decades of the 20th century, sought to tame national populism in all its forms.

In a threnody of 1942 for the capitalist order, Capitalism, Socialism and Democracy, the Austrian economist Joseph Schumpeter predicted gloomily that comprehensive socialism was on the cards, something that most economists then believed. His nostalgia for the business-admiring civilisation of his youth in Vienna and Graz before the First World War was palpable. By the 1930s, Schumpeter observed, the ideology that had protected capitalism had started to flatline. In the Anglosphere by the same decade, the very word ‘liberal’ had been appropriated to support a slow socialism hostile to the classical liberalism espoused by the Blessed Smith. As Schumpeter joked (he was always joking), ‘As a supreme, if unintended, compliment, the enemies of private enterprise have thought it wise to appropriate its label.’

But the liberals did not surrender. After the second of the wars to end all wars, a tiny band of liberals and ordoliberals gathered at the inaugural meeting of the Mont Pèlerin Society in Switzerland and proposed the resuscitation of their ideology. In 1951, one of the society’s founders, Friedrich Hayek (who decades later won the Nobel Prize in economics), wrote that ‘thirty years ago liberalism may still have had some influence among public men, but it had well-nigh disappeared as a spiritual movement’. In 1954, the Walter Eucken Institute, based in the well-named southern German city of Freiburg, began advocating an ordered state over and above the market to offset the importunings of interest groups.

None of the different strains of liberalism, says Slobodian, whether of the classical, Anglo or Freiburg-ordo kind, was international until the Geneva School made them so. True, John Maynard Keynes, the greatest English-speaking exponent of the active use of domestic and international governance to save capitalism by ruling it, designed some of globalism’s greatest international triumphs, the Breton Woods institutions of 1944 such as the World Bank and the IMF. But, as Slobodian notes, in the United States, which following the Second World War assumed the lead in economics, ‘both Chicago School and Virginia School thinkers’ – including Milton Friedman and James Buchanan, savaged recently in fairy-tales emanating from the Left – ‘exhibited the peculiarly American quality of ignoring the rest of the world’. So did the American Keynesians.

The characteristically American version of classical liberalism, ‘libertarianism’, saw itself as defending hardy pioneers against the guvm’nt back east. Continental liberals, and in particular the Geneva School, meanwhile, wanted, as Slobodian puts it, to ‘encase’ governments and markets using technocratic means, such as liberal constitutions and supranational bodies like the European Union. He remarks, quoting a recent contributor to the annual journal of the ordoliberal movement (named, of course, Ordo), ‘Far from having a utopian belief in the market as operating independently of human intervention, “neoliberals … have pointed to the extra-economic conditions for a free economic system”.’

The main danger to free markets in a democratic age, the ordoliberals believed, is populism. Populists want the rewards right now, this afternoon. As Slobodian sees it (channelling the ordoliberals), socialism and other populisms breach the boundaries between market and government, which the ordoliberals regard as sacred and prudent. The populist is not willing to wait for the market to enrich us all, as it has since 1800 by increasing real income for the poorest by 3,000 per cent. The ordoliberals, by contrast, counsel patience.

In the Anglosphere, the economists have long taken the lead. In the German-speaking lands, the lawyers have. The Austrian-born Hayek’s ordoliberal book of 1960 was called The Constitution of Liberty and his magnum opus Law, Legislation and Liberty. Law, law, law. The cry has been echoed in the recent World Bank orthodoxy known as neo-institutionalism, inspired by the late economic historian Douglass North. If we wish to export the rule of law to a country having at present no liberal public opinion, says the World Bank, we need only introduce the institution of gowns and white wigs for lawyers. Add institutions and stir.

The recent descent of Hungary, Turkey and Poland into fascism-lite shows, though, that laws are not enough. A tyrant with initial popularity can demonise the liberal judges and technicians with startling speed. True, in South Africa the Constitutional Court kept up the legal pressure on the corrupt President Zuma, and in the United States the federal courts have constrained President Trump’s plotting against Muslims and Mexicans. But such cases make the same point: that ideology, public opinion, ethics and the rhetoric of a liberal polity run the show.

The extra-economic condition that matters in the end is not the constitution – the old Soviet Constitution was a lovely document. It is public opinion: the opinion of the public in Russia that has just now again voted for a neo-tsar, or in the UK, where a majority voted to escape the ordoliberal technocracy of Brussels.

We should reflect on maintaining a form of liberalism that has made us rich and free. You can do it, class, by attending to this brilliant, scholarly book.