Thus, “Government did not ‘direct the process’ of the economy. It merely established the ‘forms’ or structural conditions within which those processes could function effectively” (Gerber 1998, 248). Ordoliberals called this “indirect regulation,” which comprised “constitutive” and “regulative” principles. Constitutive principles—the fundamental principles of economic policy—served to establish the form of the economic system. They included monetary stability, open markets, private property, contractual freedom, liability, and policy consistency. Regulative principles flowed from constitutive principles, functioning to maintain the efficaciousness of constitutive principles.

Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, loc. 1088