Rüstow named the position and supplied its sociology, and the name has since been taken over by people who mean the opposite of what he did.
At the Verein für Socialpolitik in 1932, with the Weimar Republic collapsing, he argued that the crisis of liberalism was the fault of laissez-faire: a state too weak to resist organized interests had allowed the economy to be carved up by cartels and subsidy-seekers, and the resulting discredit of the market was making authoritarian solutions attractive. What was needed was a "new liberalism" with a strong, independent state standing above interests and enforcing competition — and at the Colloque Walter Lippmann in Paris in 1938 this program acquired the label neoliberalism, then meaning almost precisely the reverse of its current use.
He spent the Nazi years in Istanbul, where a colony of exiled German academics taught, and returned to Heidelberg after the war.
His distinctive contribution beyond Eucken's economics is the argument that a market order cannot be self-sustaining because it does not produce the conditions it consumes. Vitalpolitik — a politics of life — was his term for policy attending to how people actually live: whether they own anything, whether work is dignified, whether communities and families are intact. Market competition among rootless, propertyless individuals produces the alienation on which mass movements feed, so the frame around the market must be social and moral as well as legal.
With Röpke he gave ordoliberalism its conservative wing, and the "social" half of Germany's social market economy owes as much to this argument as to Erhard's economics.